Britain's bank 'ring-fencing' rules need simplifying, review shows



By Huw Jones

LONDON, Jan 19 (Reuters) - Capital rules imposed on Britain's high street banks after bailouts during the global financial crisis have not harmed competition but may need simplifying, a government-sponsored review said on Wednesday.

Since January 2019, banks like HSBC, Lloyds, NatWest and Barclays with deposits of 25 billion pounds ($34 billion) or more have been required to hold extra capital around their retail divisions to insulate them from any blow-ups in separate trading and investment operations.

The so-called ring-fencing regime was introduced after Britain's taxpayers had to bail out several undercapitalised banks during the 2007-09 financial crisis.

"The ring-fencing regime has had no significant impact on competition in retail banking or its submarkets," the review, commissioned by the finance ministry, said in an interim statement.

"The current rules have resulted in unintended consequences that create unnecessary rigidity for customers, banks, and regulators."

Banking lobby UK Finance Link said last year that Britain should consider dismantling the regime or risk harming post-Brexit competitiveness.

"The ring-fencing regime has the potential to constrain the competitiveness of UK banks, but to date this impact has not been substantial," the review statement said.

UK Finance said it was important to consider whether the benefits of ring-fencing to financial stability outweigh its costs, and it looked forward to the review finalising recommendations for improving outcomes to customers, increasing the regime's flexibility and cutting complexity.

The review, chaired by finance industry veteran Keith Skeoch, signalled in its statement that later this year it would recommend increasing flexibility in the rules to reduce unnecessary complexity, rather than any radical surgery.

The Bank of England's head of banking supervision, Deputy Governor Sam Woods, has vowed to defend the ring-fencing rules to his last drop of blood as banks lobbied for the 25 billion pound threshold to be raised.

Goldman Sachs closed Link its easy access saving business in 2020 to new customers in Britain after deposits surged close to the 25 billion threshold that would force it to comply with the ring-fencing rules.

Banks have warned that ring-fencing has triggered unfair competition in mortgages as banks inside the ring-fence use deposits to fight for more market share.

The evidence suggests that ring-fencing has not damaged competition in consumer credit, small business lending or mortgages, the review said.

The review said the ring-fencing rules have helped to bolster financial stability, though these benefits have not been observed for smaller and less complex banks which don't have investment banking operations.

Woods has already flagged plans for simpler rules for smaller lenders.

Banks have separate rules on resolution, or procedures for winding themselves up in a crisis without needing taxpayer bailouts, and the review said these rules coupled with ring-fencing added complexity to regulation.

($1 = 0.7350 pounds)
Reporting by Huw Jones, Editing by Louise Heavens and Angus MacSwan

免責聲明: XM Group提供線上交易平台的登入和執行服務,允許個人查看和/或使用網站所提供的內容,但不進行任何更改或擴展其服務和訪問權限,並受以下條款與條例約束:(i)條款與條例;(ii)風險提示;(iii)完全免責聲明。網站內部所提供的所有資訊,僅限於一般資訊用途。請注意,我們所有的線上交易平台內容並不構成,也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。

所有缐上交易平台所發佈的資料,僅適用於教育/資訊類用途,不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議,或是交易價格紀錄,或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。

本網站的所有XM和第三方所提供的内容,包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接,皆爲‘按原狀’,並作爲一般市場評論所提供,而非投資建議。請理解和接受,所有被歸類為投資研究範圍的相關内容,並非爲了促進投資研究獨立性,而根據法律要求所編寫,而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊,相關詳情請點擊 這裡查看。

我們運用 cookies 提供您最佳之網頁使用經驗。更改您的cookie 設定跟詳情。

風險提示:您的資金存在風險。槓桿商品並不適合所有客戶。請詳細閱讀我們的風險聲明