Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

UK finance lobby urges rules rethink to unlock capital for COVID-19 recovery

04/14/2021 | 05:32pm EDT
FILE PHOTO: Canary Wharf stands in London

LONDON (Reuters) - Britain should rethink financial rules to free up capital for economic recovery from the COVID-19 pandemic, TheCityUK lobby said in a report on Wednesday.

Britain suffered its worst economic downturn in 300 years in 2020 as lockdowns shuttered businesses, though growth is forecast to rebound strongly this year.

Regulators in Britain delayed some new financial rules to give banks breathing space for dealing with customers struggling with the fallout from the pandemic.

Britain no longer has to comply with European Union financial rules since full Brexit on Dec. 31, making it easier to tweak regulations.

TheCityUK, which promotes Britain as a global financial and professional services centre, urged the government and regulators to "demonstrate explicitly" in the short-term how implementing pending regulation would contribute to the UK's economic recovery.

UK regulators should also consult with the financial sector to identify and take forward "proposals to unlock capital" held by banks, insurers and other financial firms, it recommended.

"This activity should include engagement with HM Treasury and HM Revenue & Customs to consider whether the cumulative effect of both regulatory and tax policy changes, even if for a temporary period, can maximise the scope for lenders and investors to deploy capital," TheCityUK said.

The Bank of England has already sought to persuade banks to tap some of their capital buffers to ride the COVID-19 crisis.

"However, there is a general consensus that they have been reluctant to do so, in part because they have not yet needed to and in part because there is the potential for unintended consequences if a bank does so," TheCityUK said.

Britain's insurers have already called for easing of capital rules to unlock 35 billion pounds to invest in climate-friendly projects for economic recovery.

BoE Deputy Governor Sam Woods said last month the ongoing review of insurance solvency rules would not lead to a material drop in capital requirements.

(Reporting by Huw Jones; Editing by Bernadette Baum)

By Huw Jones

© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / BRITISH POUND (AUD/GBP) -0.34% 0.54968 Delayed Quote.-2.21%
CANADIAN DOLLAR / BRITISH POUND (CAD/GBP) -0.01% 0.585549 Delayed Quote.1.89%
EURO / BRITISH POUND (EUR/GBP) 0.11% 0.86261 Delayed Quote.-3.61%
INDIAN RUPEE / BRITISH POUND (INR/GBP) -0.10% 0.009678 Delayed Quote.-3.31%
US DOLLAR / BRITISH POUND (USD/GBP) -0.03% 0.709089 Delayed Quote.-2.97%
Latest news "Economy & Forex"
07:22aTSX futures point to lower open as crude weakens
07:21aMicrosoft says it investigated Gates' involvement with employee
07:20aAT&T merging media assets with Discovery to create streaming powerhouse
07:19aBHARTI AIRTEL  : India's Bharti Airtel swings to quarterly profit on subscriber additions
07:15aEU to tighten rules on ship recycling, restore areas of seas and oceans
07:13aChina facilitates interbank borrowing in foreign currencies
07:11aAt&t’s warnermedia and discovery inc creating standalone company by combining operations
07:11aBritain's pension fund USS invests 225 million euros in Spanish renewables
07:08aIndonesia's Gojek, Tokopedia to create biggest local tech group
07:07aBritain's travel reopening not enough, say BA and Heathrow bosses
Latest news "Economy & Forex"