Independent Banking Commission Proposes Measures To Improve Competition

On Monday this week, the Independent Commission on Banking ('IBC'), led by former head of the OFT Sir John Vickers, published its interim report setting out its provisional views on possible reforms to improve stability and competition in UK banking. A key focus is on the steps that should be taken (above and beyond the general application of competition and merger control laws) to remedy the perceived weakening of competition in the UK retail banking sector as a result of the financial crisis.

As part of its package of proposals, the IBC is proposing that measures be taken to make it easier for customers to switch banks. In particular, it is proposed that customers should be able to change banking service providers without changing their bank account number. This would remove the need to transfer direct debits and standing orders, which is considered to be the main remaining area where switching problems may arise.