By Daniel Hunter

The Office of Fair Trading (OFT) has announced a market study on competition in banking for small and medium-sized businesses (SMEs) and is seeking views on its scope.

The study is part of the OFT's continuing planned programme of work in retail banking, of which the first stage was a review of personal current accounts, concluded this January.

The OFT is now bringing forward its review of banking for SMEs. It also coincides with the final report of the Parliamentary Commission on Banking Standards and continuing public interest in this area.

The SME banking study will cover England, Northern Ireland, Scotland and Wales. The OFT is launching the first step of this work today and is seeking views on its proposed scope, in particular on:

- competition in the supply of banking services to SMEs - whether SMEs have access to services that meet their needs and represent good value;

- competition in the supply of lending or other finance to SMEs - such as whether any lack of competition between banks is holding back SME lending or other finance to SMEs;

- whether there are types of SME (for example, start-ups or small financial firms) that face particular difficulties, and if so why.

"A competitive banking system and access to finance is vital to businesses and to economic growth," Clive Maxwell, OFT Chief Executive, said.

"Our review of SME banking is part of an ongoing planned programme of work in this area to allow the Competition and Markets Authority to decide whether or not to make a market investigation reference by 2015. We welcome today's Parliamentary Commission on Banking Standards report which stresses the importance of competition in this sector."

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