Ashurst has joined magic circle trio Clifford Chance (CC), Freshfields Bruckhaus Deringer and Linklaters in advising the UK's four largest banks on an inquiry into competition in the sector.

The Competition and Markets Authority (CMA) launched the probe earlier this month after it found a "lack of effective competition" in current account and small and medium enterprise lending services.

Ashurst's Global Head of Competition and EU law Nigel Parr is leading a team advising Lloyds Banking Group. In 2012, the firm was reappointed to Lloyd's legal panel for a minimum term of two years.

Legal Week also understands that Freshfields, CC and Linklaters are involved as advisors for the other three main high street banks, HSBC, Barclays and Royal Bank of Scotland (RBS) respectively.

Freshfields has previously worked with HSBC on a $1.9bn (£1.2bn) settlement with the US Department of Justice over money laundering and sanctions laws breaches in 2012.

The same year, CC advised Barclays on its £59.5m settlement with the Financial Services Authority (FSA) for manipulating the Libor interbank lending rates.

RBS is a regular client of Linklaters', which advised on the bank's £25.5bn government bailout in November 2009.

The CMA's report highlighted barriers to entry for challenger banks, as well as difficulties when comparing lenders and a low number of customers switching between banks.

The watchdog found that 77% of the personal current account market in the UK is owned by the largest four providers, with the same 'big four' also accounting for 85% of business current accounts.