Banks and Competition

The Journal reports today that

BRITAIN'S biggest banks are poised to reveal more eye-watering profits as the banking results season gets under way next week. City analysts have predicted combined profits of around £24bn from four banking giants – HSBC, Barclays, Lloyds and Standard Chartered – while Royal Bank of Scotland is expected to post a narrowed loss. The expected haul, up more than 10% on last year, will be seen as a signal that the banking sector is back on track after the global financial crisis.

When I read statements like that I am reminded of this chart from the latest Bank of England Inflation Report

Then I remind myself that banks may pay more than Bank Rate, remembering that the Bank of England has said that there has been an increase in bank funding costs since the start of the financial crisis. So, I look at LIBOR - the London interbank ofered rate - basically the rate at which banks borrow money for one day, one month, two months, six months, one year, etc. - and I find

 

Then I wonder, despite my earlier post that there is evidence that banking in Britain is reasonably competitive, whether the rise in the spread between the interest rates on personal loan and Bank Rate since 2009 could have occurred if competition was much stronger in the sector in the UK?

Am I missing something?