Statement
Today I have laid before Parliament the Final Report on behalf of the Independent Panel on Ring-fencing and Proprietary Trading. In 2020, the Treasury appointed an independent panel[1] - firstly to review the operation of the legislation related to ring-fencing; and secondly review banks’ proprietary trading activities following a statutory report from the Prudential Regulation Authority published in September 2020[2] Given the inherent links between the structure of the banking sector and proprietary trading activities, the Treasury appointed a single panel to conduct both reviews.
The ring-fencing regime was introduced in the aftermath of the 2008 financial crisis, following recommendations from the Independent Commission on Banking in 2011, to strengthen the resilience of the UK banking sector. The regime, which came into force in January 2019, separates core retail banking services from investment banking activities, with the aim of protecting depositors from riskier activity conducted outside of the ringfence or in the wider financial system.
Following Brexit, the government has the opportunity to develop an approach to financial regulation that better suits our markets, while maintaining high standards, fostering competition, and boosting international competitiveness.
The Treasury welcomes the Panel’s comprehensive set of recommendations. The Treasury will establish a taskforce with the Bank of England with immediate effect to assess the Panel’s recommendations and options for taking them forward and will publish a government response later this year.
This report is published at https://www.gov.uk/government/publications/independent-panel-on-ring-fencing-and-proprietary-trading-final-report and copies are available in the Vote Office.
[1] Terms of reference for the Panel’s appointment https://www.gov.uk/government/publications/members-of-the-ring-fencing-and-proprietary-trading-independent-review-panel-announced-and-terms-of-reference-for-the-review-published/independent-reviews-of-ring-fencing-and-proprietary-trading-terms-of-reference
[2] https://www.bankofengland.co.uk/prudential-regulation/publication/2020/proprietary-trading-review
Statement from
Linked statements
This statement has also been made in the House of Lords