The Prudential Regulation Authority plans to ease capital buffers for smaller banks, among a range of measures in a bid to boost UK growth.
The proposals come in a letter to Prime Minister Keir Starmer and Chancellor Rachel Reeves in response to the government’s call on regulators to ease business red tape to allow the UK economy to escape its persistent low growth.
PRA chief executive Sam Woods says the body is consulting with lenders over a “material simplification of capital requirements for small banks”.
Woods adds that the move will “lower costs for small firms without increasing riskiness” and will “support their customers and the economy,” in a letter dated 15 January, but released yesterday (20 January).
The watchdog adds that this year it also plans to cut “little-used or duplicative data” it collects from all banks “to reduce the burden on firms while still meeting the needs of day-to-day supervision and policymaking.”
However, the body, part of the Bank of England, adds this measure “will require some upfront investment funded through the PRA levy”.
Among other proposals the regulator plans to limit the number of wider regulatory principles, sometimes called ‘have regards,’ against which it makes judgments.
The body currently weighs around 25 such principles, which cover areas such as transparency, consumer responsibility and senior management responsibility.
It says “there is scope to rationalise some of these ‘have regards’” around climate and environment.
The body will also look to reduce “potential overlaps” with “other relevant regulators.”
It is also studying options to launch a ‘concierge service’ for foreign firms who want to invest in Britain to help “navigate the UK,” based on the approach of the Monetary Authority of Singapore.
Last week, Financial Conduct Authority chief executive Nikhil Rathi also released a letter to the Prime Minister and the Chancellor pledging to help the government drive for growth.
Rathi said that the City watchdog would “begin simplifying responsible lending and advice rules for mortgages, supporting home ownership and opening a discussion on the balance between access to lending and levels of defaults”.
The UK economy edged 0.1% higher in November, according to the latest official data, driven by pub trade, restaurants and the construction industry — after shrinking in October and September.