UK to Tweak Bank Ring-Fencing Rules for Global Competitiveness

Britain plans to modify ring-fencing rules on banks to enhance competitiveness in the financial sector, as announced by city minister Tulip Siddiq. The reform aims to boost economic growth while ensuring financial stability, raising the threshold for retail deposits and introducing new exemptions.

Britain is set to revise its ring-fencing rules for banks, seeking to enhance the competitiveness of the banking sector, city minister Tulip Siddiq announced on Monday. Introduced after the 2007-09 financial crisis, these rules aimed to segregate consumer lending from riskier investment banking.

The country's intent to attract global investors was underscored at an investment summit on the same day. Banks have long claimed that the rules were cumbersome, hindering their global competitiveness. Siddiq indicated that the government plans a reform package to foster economic growth without compromising financial stability.

The new regulations will increase the threshold for retail deposits required for ring-fencing to 35 billion pounds and introduce exemptions for certain banks. These changes will allow ring-fenced banks to expand internationally and encourage investments in small enterprises. The Bank of England, overseeing lenders, has previously expressed that significant rule changes were unnecessary.

(With inputs from agencies.)