Bank Chiefs Call for End to Ring-Fencing for Economic Growth

Bank executives from HSBC, Lloyds, NatWest, and Santander UK urge the UK government to eliminate bank ring-fencing, claiming it impedes economic growth. They argue that these rules, introduced post-2008 financial crisis, are redundant and hinder competitiveness. The Treasury is considering regulatory changes to support growth.

Leading figures from HSBC, Lloyds, NatWest, and Santander UK have called on the UK government to remove bank ring-fencing, citing it as an unnecessary barrier to economic growth. In a letter to finance minister Rachel Reeves, the bank leaders emphasized that the current regulations impede their ability to support British businesses effectively.

The ring-fencing regulations were originally established in the wake of the 2008 financial crisis to protect consumer lending from riskier investment banking practices. However, the banks argue that these measures now stifle competition and render the UK's financial sector less competitive globally. While some banks confirmed the existence of the letter, others declined to comment.

A Treasury spokesperson acknowledged the significance of the banking sector in driving economic growth and noted the government's willingness to consider more flexible regulatory approaches. Despite these discussions, Bank of England governor Andrew Bailey cautioned against overlooking the lessons of the financial crisis in the pursuit of deregulation.

(With inputs from agencies.)