OFT to encourage new UK banks

by Gill Montia

Story link: OFT to encourage new UK banks

The Office of Fair Trading (OFT) has published a financial services plan setting out its approach to the sector in the short and medium term.

The work pledges that “as public decisions are made to deal with the current financial crisis, they do not harm competition over the long term and thus reduce the future growth of the UK economy”.

The watchdog also reaffirms its commitment “to promote fairness and responsibility in the relationship between the credit industry (including banks and debt businesses) and their customers, to deal with the immediate issues facing consumers”.

The report also makes it clear that the OFT will be encouraging new players in the UK banking sector.

The stance will be welcome news to Tesco, which has already revealed plans to set up current account facilities within its Tesco Personal Finance unit and to enter the UK mortgage market.

It may also encourage other retailers, such as Boots, who have considered expanding their services businesses into banking.