Following the publication of the final report of the Independent Panel on Ring-fencing and Proprietary Trading, Rt. Hon Karen Bradley MP, Chair of the APPG for Challenger Banks and Building Societies commented:
“I strongly welcome this report as it takes on board many of the concerns of the challenger sector over the anti-competitive nature of some of our existing regulations. The report makes some balanced and sensible recommendations that will be beneficial to many challenger institutions, and I therefore welcome its recommendations.
“The ability to apply the rules more flexibility with exemptions for institutions not undertaking excluded activities above a certain level are welcome. I am particularly pleased to see the recognition that the financial stability benefits of the ring- fencing regime are only relevant only to large, complex banks incapable of resolution.
“However, the report doesn’t go far enough. More radical action is necessary to break the glass-ceiling of the big institutions which have dominated the UK banking sector since the start of the 20th Century. Banking is unique in that the big brands of the Edwardian era are still the big brands of today. Our recent work on post-Brexit financial regulation has highlighted how mid-tier institutions in the UK face disproportionate burdens which makes organic growth to challenge the likes of NatWest, HSBC, Barclays and Lloyds impossible.
“If the Government is serious about its ambition to grow the City and the UK as a global financial hub it needs to allow UK firms to compete on the same basis as their European and American rivals. I welcome the acknowledgement that the UK’s ring fencing threshold needs more flexibility. However, it still compares unfavourably to the £85 billion threshold in the Euro zone and the $250 billion dollar threshold for TLAC in the United States.”
“John Glen has informed me today that HM Treasury will establish a taskforce with the Bank of England to assess the recommendation of the panel. I hope that this taskforce will consider action at the radical end of these proposals. We need more competition in our banking sector to boost post-Brexit Britain.”