CC provisionally decides to lift price controls on SME banks

The UK Competition Commission (CC) has today announced its provisional decision to lift the price controls imposed in 2003 on the UK's four largest banks providing banking services to small and medium-sized enterprises (SMEs).  The price controls (requiring the banks to offer either a certain level of interest on credit balances or free money transmission services) were intended to be temporary, pending an increase in competition as a result of behavioural undertakings also required of the banks. The CC has reached the view that competition has increased and SME customers now have higher expectations of the service that banks should provide and are more willing to consider switching if they do not get what they want.  In addition, other significant banks - including HBOS, Abbey and Alliance & Leicester - are competing more strongly.

Frontier (London) advised HSBC throughout the initial CC investigation and the review of the temporary price controls.