The House of Commons has published a
written statement by Tulip Siddiq, Economic Secretary to HM Treasury, on the status of reforms to the bank ring-fencing regime. Ms Siddiq states that the U.K. Government will implement a package of reforms as soon as parliamentary time allows. The reforms will aim to improve competition and competitiveness in the U.K. banking sector and support economic growth, while maintaining financial stability.
The reforms include:
- The introduction of a secondary threshold to exempt retail-focussed banking groups from the regime—where investment banking activity accounts for less than ten per cent of Tier 1 capital.
- New flexibilities to allow ring-fenced banks to operate globally, subject to the Prudential Regulation Authority's rules.
- Measures to encourage more investment by ring-fenced banks in U.K. SMEs.
- Measures to reduce the compliance burdens associated with the regime.
- An increase in the primary deposit threshold for ring-fenced banks, from £25bn to £35bn.
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