The Independent Commission on Banking (ICB) threatens Lloyds Banking Group as it potentially could reverse Lloyds' takeover of HBOS two years ago.

A potential annulment might be decided upon by the government due to the fact that the retail banking sector is completely led by a small number of major players.

Former gas market regulator, Clare Spottiswoode, indicates: "We might suggest reversing what happened on that day a few months back when Lloyds took over another bank."

To ensure and increase competition, officials are expected to guarantee that the market id diverse and not only in the hands of a few dominant forces. "We do not have a very healthy competitive market in financial services. If we have good competition people behave well because otherwise customers go to a competitor," states Spottiswoode.

Especially after a currency and financial crisis, the banking sector should be stabilized by improved competition by lowering the entry barriers for new banks.

Currently six big banks are in possession of 88% of the deposits, a status quo that calls for new players and entrants on the market. "Big banks will tend to look after their own interests. They will say, `look at new entrants', as proof positive of competition. They will say, `yes, you can enter the UK'. But we cannot grow quickly enough because we are regulated the same way the other banks are. There are disproportionate costs."