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Competition and the Provision of Banking Services to SMEs in the U.K

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  • John Ashton
  • Kevin Keasey

Abstract

This paper examines the report produced by the Competition Commission on the provision of SME banking services in the U.K. The report is assessed in terms of underlying assumptions used to describe and assess how banks operate and perform. The Competition Commission suggested “remedies” are drawn from a specific economic model assumed to be representative of the U.K. banking industry. It is concluded the remedies proposed by the Competition Commission are misplaced and may impose a substantial future cost on both banks and SMEs receiving banking services. It is proposed that the ramifications of this case are substantial for the present system of allocating bank funding to SMEs, in both the U.K. and international economies where similar antitrust or competition guidelines are employed. Copyright Springer 2005

Suggested Citation

  • John Ashton & Kevin Keasey, 2005. "Competition and the Provision of Banking Services to SMEs in the U.K," Small Business Economics, Springer, vol. 24(5), pages 477-485, June.
    • Handle: RePEc:kap:sbusec:v:24:y:2005:i:5:p:477-485
    DOI: 10.1007/s11187-005-6447-x
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    References listed on IDEAS

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    1. repec:zbw:bofism:1995_002 is not listed on IDEAS
    2. Berlin, Mitchell & Mester, Loretta J, 1999. "Deposits and Relationship Lending," The Review of Financial Studies, Society for Financial Studies, vol. 12(3), pages 579-607.
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    Cited by:

    1. Anoosheh Rostamkalaei & Mark Freel, 2016. "The cost of growth: small firms and the pricing of bank loans," Small Business Economics, Springer, vol. 46(2), pages 255-272, February.
    2. John K. Ashton & Andrew D. Pressey, 2009. "The Regulatory Challenge to Branding: An Interpretation of UK Competition Authority Investigations 1950-2007," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2009-02, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    3. Hua Song & Lan Wang, 2013. "The impact of private and family firms’ relational strength on financing performance in clusters," Asia Pacific Journal of Management, Springer, vol. 30(3), pages 735-748, September.
    4. John K. Ashton & Andrew D. Pressey, 2007. "The Regulatory Perception of the Marketing Function: an Interpretation of UK Competition Authority Investigations 1950-2005," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2007-, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    5. Zambaldi, Felipe & Aranha, Francisco & Lopes, Hedibert & Politi, Ricardo, 2011. "Credit granting to small firms: A Brazilian case," Journal of Business Research, Elsevier, vol. 64(3), pages 309-315, March.

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