Financial institution of England says to spice up competitors in banking, adapt to Brexit By Reuters

By Huw Jones

LONDON (Reuters) -The Financial institution of England will work to encourage extra new entrants within the banking sector because it readies for post-Brexit reforms after proving resilient through the COVID disaster, Financial institution of England Deputy Governor Sam Woods stated on Wednesday.

Britain’s retail banking sector has lengthy been dominated by the “Huge 4” as HSBC, Barclays (LON:), Lloyds (LON:) and NatWest are recognized.

The federal government and regulators have sought to extend competitors lately, however regardless that 61 new banks have been authorised within the final eight years, Huge 4 market share stays substantial, ratcheting stress on the BoE to do extra.

“A well-functioning and aggressive market is one by which corporations can enter and exit simply,” Woods stated in his annual Mansion Home speech in London’s historic monetary district.

The BoE will do extra in coming years to extend confidence that corporations can exit with out disturbing the market.

“A reliably protected exit course of is an important corollary of ease of entry, because it permits us to be extra accommodating to new entrants.”

He stated the banking and insurance coverage sector was strong regardless of the challenges of COVID-19.

“Trying throughout the banking and insurance coverage sectors as a complete, capital and liquidity positions are robust and operational resilience has largely held as much as COVID and cyber pressures,” Woods stated.

Britain is reviewing insurance coverage capital guidelines inherited from the European Union, which on Wednesday set out its proposed amendments to the principles, generally known as Solvency II.

Woods stated he was “cautiously optimistic” a significant reform package deal could possibly be achieved with out weakening capital necessities or policyholder safety.