In February 2015 we concluded our wholesale sector competition review and published our feedback statement[1]. As part of this, we announced our intention to undertake a market study into the investment and corporate banking sector. The feedback statement sets out a summary of the responses received to our call for inputs and explains why we have chosen this area for further investigation. The terms of reference for the market study will be published in May 2015 and will set out the scope of the market study.

Wholesale financial markets play a crucial role in our economy and it is important that competition works effectively within them. That is why we launched a review of competition in the wholesale sector. The review was an exploratory exercise that aimed to identify areas where competition may be weak or not be working properly in these markets.

We have now concluded our review and based on the feedback we received, we intend to launch a market study on investment banking and corporate banking services in May 2015. Within this market study, we will primarily focus on the impact of transparency and bundling on competition for investment banking and corporate banking services.

When selecting the topic for a market study, we considered a range of factors, including the potential scale of harm, the ability for us to intervene effectively at a UK level and other work being undertaken, either at a UK or EU level.

We held a series of roundtable events with stakeholders, during the consultation period, to discuss the issues raised in the call for inputs.

Read summaries of these roundtables[2]

Why did we publish a call for inputs?

• We have considerable experience of dealing with wholesale markets and their participants but we have not previously approached them from a competition perspective.
• We therefore wanted to conduct a review of competition in the wholesale sector to identify any areas that might merit further investigation through an in-depth market study.
• The review was an exploratory exercise that aimed to highlight areas from the relevant markets where competition may be weak or not be working properly.
• The review provided an opportunity for stakeholders to engage in the discussion and bring relevant issues to our attention. We took into account stakeholder responses when deciding which, if any, topics would benefit from closer inspection through an in-depth market study.

What did we look at?

The review focused primarily on competition in wholesale securities and investment markets, and related activities such as corporate banking. In particular, we considered:

• markets and market infrastructure
• investment banking
• asset management
• corporate banking

Within the call for inputs:

• We considered features of a market or behaviour that could inhibit or distort competition in the market.
• We set out examples of the types of competition issue which might warrant further investigation. These included examples of potential barriers to entry or expansion, information asymmetries, conflicts of interest, and cross-selling or bundling of services.
• We also asked stakeholders to tell us about any other potential competition issues in the sector to explore.

Wholesale sector competition review - Call for inputs[3]

What are the next steps?

We will launch the market study into investment banking and corporate banking in May 2015, with the launch of terms of reference. These will be published on our website and will set out the timings and next steps for the market study.