News from Cass Business School

Problems with City markets should ideally be resolved without intervention

Chairman of Office of Fair Trading presents Currie Lecture at Cass

Wednesday, 31 March, 2010

Philip Collins, Chairman of the Office of Fair Trading (OFT), said at a lecture at Cass last night that problems with City markets should ideally be resolved by companies themselves rather than by imposing solutions.  He suggested "shining a spotlight on a market, even without intervention or regulation, may make it more accountable to consumers, encouraging them to be more proactive and driving competition between firms."

Mr Collins made these comments as the guest speaker at the annual Currie Lecture.  The Currie Lecture is named in honour of Lord Currie of Marylebone, former Dean of Cass Business School, and was inaugurated in 2008. This lecture takes as the topic of regulation as its overarching theme.
He said the OFT’s interest in the City is distinct from other regulators who do not have a competition focus.  Whether the products and services provided are intrinsically socially or economically useful or whether they pose systematic risks are not questions for the OFT.  Our interest is in whether city markets are delivering what business consumers want on competitive terms which present good value to consumers and, more broadly, to the wider economy.
For example, in some markets fees and margins are reported to have increased significantly, whilst the risk / reward ratios and responsibilities are said to have changed.  If this is the case, why is it happening and why are competitive pressures not constraining the increases as well as attracting new entrants?  How far are consumers bargaining with providers?  If they are not doing so effectively, why is this the case?
The lecture was covered in the media, including The Daily Telegraph.

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Philip Collins with Lord Currie

Above and below: Philip Collins presenting his lecture

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