New PRA Chief Rules Out Further Bank Ring-Fencing Reforms
Katharine Braddick told lawmakers today she will not seek additional reforms to UK bank ring-fencing rules. She stated that the matter is considered settled.
The incoming leader of the United Kingdom's banking regulator has signaled a steady approach to existing financial structures. Speaking before a parliamentary committee, the future chief executive of the Prudential Regulation Authority (PRA) stated she has no intention of advocating for further changes to the nation’s bank ring-fencing rules beyond the government's current review. Katharine Braddick, a former executive at BARCLAYS PLC, is scheduled to take the helm of the PRA on July 1. The agency oversees the stability of approximately 1,300 financial institutions, including banks and insurers. Her comments come as the finance ministry prepares to release findings from a review of the ring-fencing regime, a post-financial crisis measure designed to insulate retail banking operations from higher-risk trading activities. During her pre-appointment hearing, Braddick emphasized that she does not plan to press for additional reforms. > "I've observed that the government has established it continues to want a ring fence, and that it wants that ring fence to be optimised for efficiency." > "It seems to me that the matter is settled." The banking sector remains divided over the necessity of these regulations. Major lenders such as HSBC HOLDINGS PLC, LLOYDS BANKING GROUP PLC, NATWEST GROUP PLC, and BANCO SANTANDER SA have previously lobbied for the removal of the ring-fence. These institutions argue that the rules stifle economic growth and have been superseded by other safety-focused reforms. Conversely, Barclays has been the only major bank to support maintaining the current system. Amid government efforts to reduce regulatory burdens and stimulate the economy, Braddick's background has drawn scrutiny regarding her stance on deregulation. However, she indicated that the PRA is already focused on appropriate areas, such as bank leverage ratios and streamlining data-reporting requirements. > "In terms of my understanding of where the PRA is looking through its current policy process, I think it’s looking in the obvious and right places."
