The Bank of England’s regulatory arm is championing a new “strong and simple” framework as one of the most significant changes to banking rules in 30 years. The reform is intended to boost competition and growth by easing the burden on smaller lenders.
David Bailey, a key executive at the PRA, said the new rules would help challenger banks like Metro Bank and Starling. The goal is to stop applying the same complex regulations designed for global giants to smaller domestic banks, helping them “compete and grow.”
This major reform push is being managed by Bailey, who is also a top contender to lead the PRA, as the organization juggles multiple priorities.
Alongside this pro-growth agenda, Bailey has also had to address concerns about the financial sector’s commitment to climate change. He recently reassured observers that banks remain “vibrant” on the issue, despite the recent collapse of the Net Zero Banking Alliance.
That alliance failed after major banks, including HSBC and Barclays, pulled their membership. Bailey, however, insisted the PRA’s own work on monitoring climate risk and conducting stress tests continues unabated.