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The banks have long criticised so-called ringfencing reforms, intended to separate retail banking operations from other investment practices.
The plans are designed to protect savers and taxpayers from any future crises in the financial sector, yet some lenders say that the ringfencing structure – set to go into effect in 2019 – would disrupt business practices and diminish directors’ accountability to shareholders.
With the Bank of England set to open a second consultation on the reforms within weeks, some senior banking figures are stepping up their efforts and are confident that they will get their way.
Senior executives believe that they have convinced Bank governor Mark Carney to dilute the details of the ringfencing scheme, the Sunday Times reported yesterday, indicating that Carney and the Bank of England’s prudential regulatory authority (PRA) may allow the retail and investment arms of large financial institutions to remain under one board, rather than the two separate entities initially proposed.
Chancellor George Osborne also defended the policy before the committee, telling the MPs that he did not intend to allow a looser implementation of the rules.
Treasury sources insisted last night that the government remains committed to implementing the ring-fencing reforms, with the PRA and Financial Conduct Authority (FCA) oversight intended to iron out the details.