As the financial crisis unfolded, those who trusted most strongly in free markets watched in dismay and bewilderment. They struggled to understand how competition could possibly lead to a situation where, as President Barack Obama put it, “only the state had the resources to rescue the situation”.
It is for these true believers that today an identical question is being tabled for Treasury ministers in both houses of parliament – in the Commons by Michael Fallon, deputy chairman of the Treasury select committee, and in the Lords by me. What, we are asking, was the UK market share of the top five companies in the following financial services: retail banking, corporate banking, mortgages, insurance and re-insurance, government bond issuance, foreign exchange, and credit swaps and derivatives?
The UK government owns two banks and regulates all banks. Yet in spite of having at its disposal the power of legislation and such eminent bodies as the Financial Services Authority, the Competition Commission and the Office of Fair Trading, it appears not to know the answer. Estimates range from 80 per cent to 100 per cent, which means that competition is almost over in these markets.