British banking should be blown right open

Despite the near-collapse of British banking, the old players of the industry are still firmly in control. What it needs is to be blown right open, says Matthew Lynn.

We may be used to Richard Branson's Virgin planes, trains, and health clubs, but a Virgin Bank? Thanks to a £100m investment by the American billionaire Wilbur Ross, we may end up as familiar with Virgin banks on the high street as we are with Barclays, Lloyds and HSBC.

Yet what is striking is that eighteen months after the credit crunch caused the near collapse of the British banking system, the old players are still firmly in control of the industry. These companies are widely disliked, distrusted, and they sell poorly designed products at rip-off prices. In any normal industry, they'd have been blown out of the water by dozens of entrepreneurs. The fact that they haven't been suggests banking is still an over-protected oligopoly, with too many barriers to entry.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.