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Competition and the Provision of Banking Services to SMEs in the U.K.

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Abstract

This paper examines the report produced by the Competition Commission on the provision of SME banking services in the U.K. The report is assessed in terms of underlying assumptions used to describe and assess how banks operate and perform. The Competition Commission suggested “remedies” are drawn from a specific economic model assumed to be representative of the U.K. banking industry. It is concluded the remedies proposed by the Competition Commission are misplaced and may impose a substantial future cost on both banks and SMEs receiving banking services. It is proposed that the ramifications of this case are substantial for the present system of allocating bank funding to SMEs, in both the U.K. and international economies where similar antitrust or competition guidelines are employed.

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Authors and Affiliations

  1. School of Management, University of East Anglia, Norwich, U.K.

    John Ashton

  2. International Institute of Banking and Financial Services (IIBFS), Leeds University Business School, The University of Leeds Leeds, LS2 9JT, Leeds, U.K.

    Kevin Keasey

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  1. John Ashton
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  2. Kevin Keasey
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Correspondence to John Ashton.

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Ashton, J., Keasey, K. Competition and the Provision of Banking Services to SMEs in the U.K.. Small Bus Econ 24, 477–485 (2005). https://doi.org/10.1007/s11187-005-6447-x

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  • DOI: https://doi.org/10.1007/s11187-005-6447-x

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