The banking system of the UK did not undermine the sector, Treasury report found

The UK regulatory regulation of commercial banks may need to be mitigated to avoid accidental misappropriation of competition but it has not affected the sector so far, according to a Treasury-led review.

In its first survey published Wednesday, the report found that the government had “supported the UK’s banking sector” and denied concerns by other banks that it had damaged the housing market.

The review, however, acknowledged that ringfencing could undermine the competitiveness of UK banks, particularly in raising funds and creating banking restrictions. But it found that so far the effects have been minimal.

The curb regime requires lenders with more than £ 25bn in deposits to diversify their consumer services and banking equipment to protect ordinary customers from commercial losses in accordance with laws enacted in 2013.

The bill, which was designed to prevent future taxpayers’ repatriation at the 2008 financial crisis, came into effect in 2019 after six years.

Some banks have pushed for the border to be increased. But a year-round review, by a team led by former Standard Life CEO Aberdeen Keith Skeoch, did not mention door upgrades. He further added that he had not found any evidence to support the claims of bankers who argued that the government had caused the demolition of housing prices.

“The ringfencing regime did not significantly affect the competition of commercial banks or its small markets,” it said. “Comments about the ‘closure’ of funds generated by the blockchain government are not supported by evidence” and have no obligation to “disrupt the housing market”.

Newcomers have argued that major highway lenders are pushing for extra cash on mortgages because they represent the best way to provide a “closed” capital within the retail business.

They also complained that the increased costs and complexity of tying the ropes, combined with other back-to-back rules, made it difficult for them to grow enough to compete with major competitors.

Low interest rates, Bank of England interventions, government lending mechanisms and unconventional reforms that led to a mortgage competition, the review ended.

But it did find that the regulatory elements needed to be abolished because they led to bankruptcy and the “consumer disputes” that plagued retail and retail banks, as well as the introduction of “unnecessary stability”.

The group did not publish any ideas but said it would focus on “increasing volatility” and “reducing unnecessary risks” when it submitted to Treasury in the coming months.

Some international banks have complained that the law restricts growth in the UK’s domestic currency and affects London’s international competition. They expect the Treasury to consider easing or abolishing the government after Brexit.

They have asked for an increase in the ringfence limit of at least £ 40bn to calculate economic growth since 2013. The issue is crucial for Goldman Sachs, which launched a new UK-based banking company Marcus in 2018 to support low-cost London spending. -to imitate the activities of international banks. It grew rapidly to near the ceiling of £ 25bn and stopped taking on new customers by 2020. Goldman declined to comment.

UK Finance, which represents nearly 300 financial institutions, said it was “important to consider whether the benefits of blocking financial stability outweigh its cost and the long-term potential for customers and assets after Brexit”.

Bank of England has opposed any change in ringfencing. Sam Woods, deputy ambassador, has previously said that the government is very important in the UK because its global economy is reducing the middle class economy.

The Treasury instituted this review in early 2021 because it had to review eight years after the legislation was approved by parliament.