Staff Reporter
In a strategic move to bolster economic growth, the UK government, in partnership with the Bank of England, is actively considering proposals to ease regulations for smaller banks. This initiative aims to allow these institutions to extend billions of pounds in additional lending.
During a discussion on Wednesday with the House of Lords Financial Services Regulation Committee, City Minister Emma Reynolds highlighted that the Treasury is closely collaborating with the Bank of England on this initiative. She confirmed that they are carefully reviewing feedback from stakeholders.
The government, along with the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority, is reassessing the current regulatory framework.
The objective is to foster increased growth and competition in the banking sector while ensuring consumer protection remains intact. The Treasury’s focus is on reducing regulatory red tape to facilitate this balance.
Industry experts have pointed out that existing regulations, which are more stringent than those in the US and EU, impose significant burdens on small and medium-sized lenders.
These banks have long advocated for expanded exemptions, arguing that loosening these rules could unlock substantial lending potential.
Reynolds addressed these concerns, stating, “I take your point about trapping capital, and we do want to see this target of 1.5 million homes.” This indicates that the proposed regulatory changes could also support the government’s housing goals.
