Small banks could get a boost under Bank of England plans to relax strict rules
Small banks could be boosted by the Bank of England’s plans to relax strict rules.
Since the financial crisis, lenders have been forced to maintain a larger capital safety net once they reach a certain size, in case they collapse.
Seeing the light?: In a letter to 11 banks, the Bank of England said it is considering scrapping a rule requiring banks with at least 40,000 checking accounts to raise the extra capital
The goal is to keep taxpayers from paying the bill, but small banks, including TSB and Metro, have complained that the rules are making it harder for them to grow.
In a letter to 11 banks seen by the MoS, the Bank of England said it is considering scrapping a rule requiring banks with at least 40,000 checking accounts to raise the additional capital.
It said: ‘There may also be scope for the bank to significantly raise or even remove the indicative threshold for transaction accounts. We propose to work closely with you… to ensure that this is a viable prospect before making a decision to change or remove the transaction account threshold.”
A bank boss said removing the requirement would make Britain a more attractive place for start-up banks to grow.