Bank of England says to boost competition in banking sector and adapt to Brexit By Reuters

© Reuters. FILE PHOTO: A person stands outside the Bank of England in London, Britain September 13, 2021. REUTERS / Hannah McKay

By Huw Jones

LONDON (Reuters) – The Bank of England will work to encourage more new entrants to the banking sector as it prepares for post-Brexit reforms after showing resilience during the COVID crisis, said Wednesday Bank of England Deputy Governor Sam Woods.

The UK retail banking sector has long been dominated by the ‘Big Four’ such as HSBC, Barclays (LON :), Lloyds (LON 🙂 and NatWest are known.

The government and regulators have sought to increase competition in recent years, but even though 61 new banks have been cleared in the past eight years, the Big Four’s market share remains substantial, pushing the BoE to do more. .

“A well-functioning and competitive market is one that businesses can easily enter and exit,” Woods said in his annual speech at Mansion House in London’s historic financial district.

The BoE will do more in the coming years to increase confidence that companies can come out without disrupting the market.

“A reliable and secure exit process is an essential corollary of ease of entry, as it allows us to be more accommodating with new entrants.”

He said the banking and insurance industry was robust despite the challenges of COVID-19.

“Across the banking and insurance industries, capital and liquidity positions are strong and operational resilience has largely withstood pressures from COVID and cyber,” said Woods.

Britain is reviewing insurance capital rules inherited from the European Union, which on Wednesday presented its proposed rule amendments, known as Solvency II.

Woods said he was “cautiously optimistic” that a package of major reforms could be achieved without weakening capital requirements or policyholder protection.

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