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Increased competition could improve loan rates

September 23, 2010

Increased competition could improve loan rates

Increasing competition in the banking sector would be doubly beneficial for consumers as well as lenders.

Mervyn King, the governor of the Bank of England, commented that the banking sector could do with some healthy rivalry.

The benefits of this trend would see banks and building societies offering highly competitive loan rates to customers.

It would also lead to an improvement in the standards of business being conducted in the sector overall, he said.

Mr King added: "Mutual organisations have a very important part to play in this and indeed some of the mutual organisations in banking were the ones who prospered in the crisis.

"Why? Because people trusted them. So, that is to my mind an important part of the future."

A recent report published by the Future of Banking Commission described the banking sector as "a structurally flawed industry". 

This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes.

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