France urges inquiry into competition abuse: report
France's finance minister has called on global regulators to probe potential competition abuses in the financial sector following huge government bailouts and consolidation, a report said on Tuesday.business Updated: Nov 17, 2009 07:01 IST
France's finance minister has called on global regulators to probe potential competition abuses in the financial sector following huge government bailouts and consolidation, a report said on Tuesday.
Christine Lagarde said some institutions had become too powerful in the financial sector that has been consolidated in the wake of the global economic crisis by banking failures and mergers.
"We need to make sure that we do not create institutions that have a competitive advantage," Lagarde told the Financial Times in an interview.
Lagarde told the newspaper that she had asked Mario Graghi, head of the Financial Stability Board (FSB), to prepare a report for the G20 summit in March on potential areas of concern.
The FSB groups international finance institutions, central bank chiefs and regulators from 24 countries.
"It could well be that the FSB comes back and says competition is fully respected - that there is no concerted practice, no abuse of dominant position," she said, adding however that the issues need to be looked at.
In Britain, state-rescued banks RBS and Lloyds Banking Group will be forced to sell assets in a shake-up of the banking sector, but the government will support them with 30 billion pounds (33 billion euros, 50 billion dollars).
Britain expects new banks to be born as a result of the break-ups which are the result of pressure from EU competition authorities.