UK to ease bank ring-fencing rules soon, says minister

Reuters

UK to ease bank ring-fencing rules soon, says minister

2024 10월 14 일, 오전 11:20 GMT

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Adds comment in paragraph 9

By Sachin Ravikumar and Iain Withers

LONDON, Oct 14 (Reuters) -Britain will soon take steps to ease so-called ring-fencing rules on banks introduced after the 2007-09 financial crisis, in order to improve the sector's competitiveness, city minister Tulip Siddiq said on Monday.

The move comes as Britain hosted an investment summit on Monday designed to boost the country's appeal to global investors.

The ring-fencing rules - which separate consumer lending operations from more volatile investment banking - were introduced after Britain's taxpayers had to bail out several failing lenders during the financial crisis.

Banks have long argued that the rules are too onerous and hamper Britain's competitiveness versus other global financial centres.

Siddiq said that the government would put in place a package of reforms that would also support economic growth, while maintaining financial stability.

The threshold for retail deposits required for the rules to kick in will be raised to 35 billion pounds ($46 billion), from 25 billion currently, Siddiq said.

The reforms are also set to include a secondary threshold to exempt retail-focused banks from the regime if investment banking accounts for less than 10% of their core capital, the statement added.

The changes will include flexibility to allow ring-fenced banks to operate globally and steps to encourage more investment in small businesses.

"I believe these measures will enhance the competitiveness of the UK banking system," said John Cronin, founder of the consultancy Seapoint Insights, adding the changes would likely benefit smaller banks.

The Bank of England, which regulates lenders, has previously said that the ring-fencing rules are working satisfactorily and were not in need of a major overhaul.

The BoE was not immediately available for comment.

The reforms will be implemented as soon as parliamentary time allows, Siddiq said.

($1 = 0.7666 pounds)

Reporting by Sachin Ravikumar and Iain Withers;
Writing by Catarina Demony;
Editing by Paul Sandle, Louise Heavens and Bernadette Baum

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