The Financial Conduct Authority (FCA), the UK’s financial services regulator, today confirmed its plans to take action to “improve competition in the current account market” and review the price cap on high-cost short-term credit (HCSTC). Frontier (Europe) has advised clients on all of the major FCA and Competition and Markets Authority (CMA) market investigations in recent years, and delivered the analytical work underpinning the design of the HCSTC price cap.
Today’s announcement provides more detail on the FCA’s approach to the aspects of the CMA’s retail banking remedy package that it has been tasked with taking forward. The FCA has said it will take a wider remit than the CMA originally envisaged in its final report:
- widening the scope of the Open Banking remedy;
- reopening the debate around ‘free if in credit’ accounts; and
- including overdraft pricing in a wider piece of work looking into high cost credit, which will include a review of the HCSTC price cap.
- A Call for Inputs will be issued later this month, which is likely to be the first step in a substantial market investigation.
Frontier regularly advises clients on issues of strategy, regulation and competition in the financial services sector.
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