Independent Panel on Ring-fencing and Proprietary Trading: Final Report

(Limited Text - Ministerial Extracts only)

Tuesday 15th March 2022 Written Statements

[The Economic Secretary to the Treasury (John Glen)]

Today I have laid before Parliament the final report on behalf of the Independent Panel on Ringfencing and Proprietary Trading. In 2020, the Treasury appointed an independent panel¹—first to review the operation of the legislation related to ring-fencing; and secondly to review banks’ proprietary trading activities, following a statutory report from the Prudential Regulation Authority published in September 2020². 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 have 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

[HCWS683]