The UK has outlined plans to relax ringfencing rules that force lenders to separate their retail operations from other activities, but stopped short of scrapping them as called for by some of the country’s biggest banks.
Lucy Rigby, chief secretary to the Treasury, said the planned changes to one of the main restrictions imposed on UK banks after the 2008 financial crash would “unlock finance for growth” by freeing up £80bn of extra lending, while maintaining key protections against a crisis.
Banks have lobbied hard for the government to scrap the rules, which aim to protect deposits from retail consumers and small businesses by requiring big lenders to separate them inside legal entities with higher levels of capital and restricted activities.