On a number of occasions here in Financial Regulation Matters we have discussed the credit rating and audit industries. They have taken up a number of posts on account of their negative and impactful behaviour, and in most of the posts we attempt to conclude as to why they a. act in such a manner, b. are allowed to continue acting in such a manner, and c. what may be done to alter that behaviour. Often, we conclude by discussing the oligopolistic features of their industry and implying that those dynamics are the fundamental answer to all three aspects. However, the word oligopoly is sometimes defined within the posts, but often it is not elaborated what the concept is and why it is so impactful within these financial industries that are so crucial. In this post we will dissect the concept of an oligopoly and examine why the two identified industries are absolutely defined by the concept. The term oligopoly roughly derives from the Greek words oligoi – meaning ‘few’ – and p

We have only looked fleetingly at the story of Grant Thornton – The British-founded ‘professional services’ company that is now regarded as one of the largest firms outside of the traditional ‘Big Four’ audit firms – and its connection to Patisserie Valarie. As the chain sits currently in administration and is ‘ set to be sold off piecemeal ’, the role of Grant Thornton in auditing the chain just before it collapsed has brought the auditor firmly into the spotlight. Grant Thornton’s CEO is currently facing questions from MPs and, as part of his response, he has told the House of Commons Committee that there was an ‘expectation gap’ between what is expected of audit firms and what they do in practice. In this post, we will review the story and analyse the developments, but focus more on this concept of an ‘expectation gap’ existing in relation to the auditing industry, which is particularly centralised within the financialised society we live in. Patisserie Valerie entered in