On 9 July 2014, the FCA published a speech given by Mary Starks (Director of Competition, FCA) entitled Competition and investment banking.
In her speech, Mrs Starks discusses the FCA’s review of competition in the wholesale sector explaining its scope, the types of issues it is looking at, and how the review links to its competition mandate.
When discussing the purpose of the wholesale review Mrs Stark explains that it is an exploratory exercise that is designed to allow the FCA to determine where competition may be weak or not be working effectively in the wholesale sector. The FCA intends to use it to identify any areas that might merit further investigation through a full, in-depth market study. The FCA has started this process by publishing a “call for inputs”.
Mrs Stark also mentions that the review is wide ranging, covering activities relating to the markets and market infrastructure itself, asset management, corporate banking and investment banking. In other words, it has a strong focus on those areas and participants that are involved in the investment chain. The FCA believes that it is important to take this wide scope at this stage as its competition mandate is broad.
Another point that Mrs Stark makes is that in its wholesale review the FCA is not just looking at competition in isolation. The FCA’s competition objective refers specifically to promoting effective competition ‘in the interests of consumers’. So where competition issues are raised, the FCA also wants to see evidence and views on the potential scale of any associated consumer detriment. And when the FCA says consumer, it means it in the widest sense, not just retail consumers but also wholesale ones.
View Competition and investment banking, 9 July 2014