Concerns about major banks launching attacks as the UK seeks to introduce open banking are fully justified. Incumbents in any industry have a hidden motive when they offer to help create a rulebook. In the financial industry, it’s easier to get a seat at the table.
Regulatory capture-technology that distorts market rules to the benefit of market participants-is thriving in the UK, which is vulnerable to the curious elite. Regulators’ willingness to confront banks has caused a financial crisis Libor interest rate setting scandal..
Later, the Financial Services Agency diverged into the Financial Conduct Authority and the Prudential Regulation Authority, which introduced more rigor. However, it still had a great influence on large banks. It was despite new entrants in the form of Challenger banks such as Metrobank and FinTech start-ups such as Sterling and Monzo.
Open banking includes data sharing settings designed to encourage competition. It is envisioned as a platform accessible to all banks, payment companies and other companies to share data, providing a fair competition for beginner FinTech.
Delayed by coronavirus Consultation Under the Competition and Markets Authority. The proposal of the agency overseeing open banking from Citigroup UK Finance is endorsed by CMA.But big banks have too much room to deal with Affect that policy Threatened to raise funds. Previous efforts by CMAs, the Financial Conduct Authority and politicians to open up the banking industry have all been significantly diluted.
Large banks have protested that they are already part of the burden of large market share by offering free checking accounts and acting as an intermediary for government-backed financial institutions. .. Covid-19 loan..
Open banking is also a response to what bank regulators have with their existential challenges. Most British people find banking boring and don’t mind that it’s oli anoli fortune-telling. Years of research have shown that people are more likely to abandon their spouse than lenders. But that is not a reason for banks to design their own regulators.
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Regulatory capture: banks should not write their own rule book Source link Regulatory capture: banks should not write their own rule book