14 May 2002
The FCA granted the savings banks an exemption, which enables them to jointly agree on the price recommendations of banking services. The exemption is valid for ten years and concerns e.g. deposit rates and service fees.
The exempted cooperation only concerns the national price recommendations issued by the Savings Banks Association. Single savings banks cannot agree on the pricing of their banking services among themselves. The savings banks are independent business undertakings and therefore need an exemption for joint price collaboration.
An exemption is granted if the benefits of the cooperation shall primarily accrue to the customers. The FCA estimates that competition in the banking business is functional to the extent that the cost-benefits achieved by the common pricing also benefit the banks’ customers. Competition has been increased because customers now have more and more options to choose from in their banking services. The increase is due to the raid development of banking technology and the spread of IT connections.
A further argument for granting the exemption is that competition in the banking business mainly takes places between the banking groups. In Finland, the joint share of the three largest banks is approximately 85 per cent. The market share of the savings banks is well below ten per cent.
Finland has 40 independent saving banks, which have 260 offices in 167 municipalities.
The FCA granted a corresponding exemption on price cooperation to the OKOBANK Group Central Cooperative in 1998.
Director Kirsi Leivo
Senior Research Officer Anne Rämö