Tuesday 6 December 2016

British regulator gains extra powers to police financial markets

Huw Jones

Published 02/04/2015 | 02:30

A trader looks at his screens on the floor of the New York Stock Exchange. Photo: Reuters
A trader looks at his screens on the floor of the New York Stock Exchange. Photo: Reuters

British banks and markets are bracing themselves for a fresh onslaught from their regulator after it assumed extra powers to police competition in financial markets yesterday.

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The Financial Conduct Authority (FCA), launched in 2013 to shake up supervision after the 2007-09 financial crisis highlighted failures, already has competition as a core aim.

But the changes mean the watchdog can back this up by being able to punish firms that breach UK and European Union competition law, break up markets, or refer a market directly to Britain's lead competition body, the Competition and Markets Authority (CMA).

Lawyers working in the sector expect relatively quick results as the government presses the FCA to boost competition in a banking sector dominated by the "Big Five" high street lenders as new challengers take time to build up market share.

Two reviews in particular will be shaped by the new powers.

The FCA has announced an investigation into wholesale banking and will be able to use its new powers to make changes.

And a separate Fair and Effective Markets Review (FEMR) makes recommendations in June which the industry hopes will be limited to revising voluntary codes of conduct.

(Reuters)

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