Government to raise bank ring fencing threshold

General Fintech
1

In a written ministerial statement, City Minister Tulip Siddiq announced a package of reforms to ‘improve competition and competitiveness’ in the UK banking sector.

The move will allow banks to amass £35billion of customer deposits before needing to ring-fence retail banking operations from riskier investment banking operations.

US investment banking giants JP Morgan and Goldman Sachs, which own the popular deposit-taking accounts Chase and Marcus in the UK, are set to benefit from the change - and it could result in them offering higher savings rates.

Chase and Marcus are not ring-fenced from the investment banks’ wider operations, so the £25billion limit was a barrier to their deposit-taking growth.

2 Likes
2

I think this is stupid. Won’t raise competition, will only lead to American conglomerates benefitting from regulation exemptions.

None of our domestic banks of a decent size will benefit from this.

3

Although the article suggests savers rates may improve as an indirect consequence. I’ll take that.

4

Until they hit the new boundaries. They’ve only got 10,000m or so until they do. Can’t imagine it will do much for savers

5

They are hardly going to say it’s solely to raise profits - they have to suggest a consumer benefit of some kind.

1 Like