UK Banking Regulators to Relax Post-Financial Crisis Rules
Plans announced by the Prudential Regulation Authority and Financial Conduct Authority aim to reduce administrative burden and boost the financial services sector.
City regulators in the UK have unveiled plans to dismantle banking rules established in the wake of the financial crisis, a move expected to provide a £2 billion boost to the financial services sector.
The proposed changes include the abolition of a certification regime that subjects 139,000 staff to annual checks and requires their inclusion on a financial services register. Additionally, the pre-approval requirement for executives by regulators will be eliminated for most roles, except for the most senior positions such as chief executives, finance directors, and chairmen.
These proposals were announced by Prudential Regulation Authority (PRA) chief Katharine Braddick and Financial Conduct Authority (FCA) boss Nikhil Rathi. Braddick, who took over the PRA this year, stated that the revisions would maintain accountability for critical roles while reducing administrative burdens.
The PRA estimates that these changes will save firms approximately £2 billion over a decade. The authority indicated that the reforms would enable firms to reallocate resources towards ensuring good customer and market outcomes, attracting talent, and fostering innovation and investment, thereby supporting UK economic growth and competitiveness.
The certification regime was originally introduced a decade ago to cultivate a culture of accountability within banks. These regulations followed the 2008-2009 financial crisis, which was largely attributed to the banking industry. A cap on bonuses was previously removed in 2023.
In separate news, Barclays reported a 12 percent rise in third-quarter profits to £2.3 billion. However, the bank's shares fell due to underperformance in its fixed income trading business, which saw income decline by 19 percent. This drop was more pronounced than that experienced by U.S. rivals. Despite this, income from equities increased by 47 percent, contributing to the wider investment bank's earnings of £3.1 billion. Barclays' chief executive, CS Venkatakrishnan, expressed disappointment with the results.