Richard Burgon – 2016 Parliamentary Question to the HM Treasury
The below Parliamentary question was asked by Richard Burgon on 2016-06-15.
To ask Mr Chancellor of the Exchequer, what correspondence he has had with (a) the Competition and Markets Authority, (b) the Prudential Regulation Authority and (c) new entrant banks about the internal ratings-based approach and the standardised approach for risk weights in capital requirements regulation; and if he will place a copy of that correspondence in the Library.
Harriett Baldwin
The government is committed to increasing banking competition and meets with a wide range of institutions as part of the process of developing policy to help drive more competition.
We have already taken significant action to improve competition in banking. This includes:
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Delivering the Current Account Switch Service and midata so customers are able to compare personal current accounts and switch where they see a better deal – simply, quickly and reliably;
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Lowering barriers to entry and helping to establish the New Bank start-up Unit, making it quicker and easier for new banks to enter the market and compete effectively with the incumbents;
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Creating the Competition and Markets Authority (CMA) as a single, stronger competition regulator, to promote competition and ensure markets work well for consumers, businesses and the wider economy.
The government is also taking action by working with the Prudential Regulation Authority (PRA) and the Bank of England to introduce a more proportionate prudential regime for smaller banks and building societies. The exchange of letters between the Economic Secretary and Andrew Bailey published in November 2015 highlights this work.
In its retail banking market investigation, the CMA provisionally found that banks on the standardised approach are at a competitive disadvantage in the provision of lower LTV mortgages compared to banks using internal models. It also stated that the capital requirements regime has the potential to impact on competition in retail banking in a range of areas. The government, working with the PRA and Bank of England will take forward the issues identified by the CMA.
