Banks that arrange multi-billion euro bond and share deals for companies will be probed for the first time by Britain's financial markets watchdog.
The agency will investigate whether the banks are offering fair and transparent service for the billions they earn in fees.
After four years of scandal over manipulation in the currency market and of Libor interest rates, the Financial Conduct Authority's (FCA) competition review turns the spotlight on primary markets which are crucial to funding of corporate investment.
The FCA had voiced concern in February that customers may not be getting value for money from wholesale banking services - a £10bn (€14bn) sector in Britain.
Banks based in London dominate the European capital markets.
"The market study will examine whether there are areas of investment and corporate banking services where competition may not be working well," the FCA said in a statement yesterday.
The review comes at a time of increased emphasis on market-based finance in the European Union as the bloc plans a Capital Markets Union whose aim is to offset the effect of banks reining in lending.
The regulator will look at transparency in how banks manage the sale of debt and equity on behalf of companies, after concerns were raised that they may have incentives to favour certain investors.
"Were something untoward to be found out by this review, I would be surprised," said Ruari Ewing, a director at banking lobby group ICMA that this week published a new recommendation urging banks to keep firms abreast of bond allocations.