UK government tells BoE to focus more on global banking competitiveness

By David Milliken

LONDON (Reuters) – Britain’s government said on Friday that it plans to change the law to require the Bank of England’s Prudential Regulation Authority (PRA) to focus more on the financial sector’s global competitiveness, as part of wider-ranging reforms.

The PRA, which regulates British banks and insurers, already has a duty to promote financial services competition, but this will be widened to cover “the international competitiveness of the UK economy – including in particular the financial services sector – and its growth in the medium to long term”.

The new requirement – set out by finance minister Jeremy Hunt in a letter to BoE Governor Andrew Bailey – is “subject to aligning with relevant international standards”.

Bailey has repeatedly said that effective regulation, ensuring financial stability, is essential for Britain to be attractive to foreign investors.

Asked about the proposals, a BoE spokesperson said: “We look forward to working with HMT (Treasury)… and will continue to maintain a safe and sound financial system which supports the UK’s position as a major global financial centre.”

Other plans include a consultation in the coming weeks on a central bank digital currency – a project that Prime Minister Rishi Sunak was keen to explore during his time as a finance minister.

(Reporting by David Milliken; editing by William James)