Britain’s Prudential Regulation Authority plans to ease capital buffers for smaller banks as part of a series of measures to boost Britain’s economic growth.
The proposals were put forward in a letter to Prime Minister Keir Starmer and Chancellor Rachel Reeves in response to calls from the government for regulators to loosen business red tape and free the UK economy from persistently low growth.
PRA chief executive Sam Woods said the agency was consulting with lenders on “substantial simplification of capital requirements for smaller banks”.
In a letter dated January 15 but published yesterday (January 20), Woods added that the move would “reduce costs for small businesses without increasing risk” and would “support their Customers and the Economy”.
The regulator added that it also plans to cut “rarely used or duplicated data” collected from all banks this year “to reduce the burden on businesses while still meeting day-to-day supervisory and policy-making needs.”
However, the agency, part of the Bank of England, added that the measure “will require some upfront investment through the PRA levy”.
Among other suggestions, regulators plan to limit the number of broader regulatory principles (sometimes called “respect”) on which judgments are based.
The agency is currently weighing about 25 such principles, covering areas such as transparency, consumer responsibility and senior management accountability.
It said that around climate and the environment, “there is room for rationalization of some of these ‘concerns'”.
The agency will also seek to reduce “potential overlap” with “other relevant regulators”.
It is also looking into launching a “concierge service” for foreign companies wanting to invest in the UK, in line with the Monetary Authority of Singapore’s approach, to help “navigate the UK”.
Last week, Nikhil Rathi, chief executive of the Financial Conduct Authority, also wrote to the Prime Minister and Chancellor of the Exchequer, pledging to help the government promote economic growth.
Ratti said the city regulator would “start to simplify rules for responsible lending and mortgage advice, support home ownership and start discussions on the balance between the lending pipeline and default levels”.
The latest official data showed the UK economy edged up 0.1% in November after shrinking in October and September, driven by the pub trade, restaurants and construction.
