Air Jordan 23s Sir David Walker
As with the CMA investigation into energy, it would not be surprising if the main banks used the opportunity of a competition inquiry to make their case rather than fight every step of the way.Banks can point to improvements in the market. It also says that there is a lack of Air Jordan 23s transparency in how banks price what they offer customers.And this comes down to one key issue. The UK current account market (with revenues of 8bn and 65 million active accounts) is based on a market anomaly the main product is given away free.Free in credit banking means that customers lack incentives to move. It also makes it harder for new entrants.Another consequence is the opaque cross subsidies that wash between different divisions in a bank.And people could well be a little cheesed off if banks started Air Jordan Spizike asking for payment to look after it.However, many argue that until there is proper transparency over how much a current account costs to run there will never be open competition.The CMA has raised the issue in the documents it has published today. The section is admittedly a little chewy, but it worth getting through.”It is also possible that Air Jordan 9 Retro there might be a degree of cross subsidy in the Personal Current Account Air Jordan 18s [PCA] market, which may be distortive of competition,” the CMA says.”Indeed, the if in credit model often involves cross subsidy by other revenue streams for PCAs such as overdraft charges.”In addition, we were also told that PCAs as a whole were loss making. If this were the case, this could suggest the existence of a cross subsidy from other retail banking products.”Free current accounts are the ultimate loss leader.Tesco Bank has already said it will charge for its new current account. The Barclays chairman, Sir David Walker, is also known to be a backer of charging as a route to greater transparency.One banking Air Jordan 4s source I spoke to this morning said that “most of the industry” would be “delighted” if charging came in as customers would receive a better service. And the banks would receive more straight forward revenue.Politically, though, the person pointed out, “it is toxic”.If charging on current accounts does flow from the CMA inquiry, there will be important questions to answer about ensuring that basic banking services are available to all.But, now the CMA has opened this Pandora box, it is going to be very difficult to nail it shut again.