As City Minister, I know that our financial services will underwrite the growth our country needs in the decade to come.
The facts speak for themselves. More than £20bn worth of equity capital has been raised in London alone this year, which is over three times what has been raised in the next three European exchanges combined.
But if we want to deliver the financing for growth, we need the right rules – ones that inspire confidence in our financial institutions and enable them to lend.
That’s why the new package of capital rules for UK banks and building societies announced by the Bank of England today doesn’t just mark the end of the road for post-2008 crisis reforms, they also pave the way towards a more prosperous country.
The Basel 3.1 package gives UK banks and building societies certainty about how much capital they will need to hold so they can finance investment and growth.
Financial stability is at the heart of these changes, ensuring banks hold sufficient capital against risks such as loans not being repaid so that people and businesses are protected against the fallout from a 2008-style financial crash.
That stability is the platform for a strong economy, but these rules go further and reflect an increased focus on growth and competitiveness. The PRA will lower its proposed capital requirements for lending to small businesses and investments in high-quality infrastructure, meaning this lending will continue to be supported.
The result is a package that support banks, supports people and supports our economy. It’s the product of government, industry and regulators pulling in the same direction.
As we continue to fix the foundations of the economy and rebuild Britain so that everyone is better off, these rules will ensure the UK banking system is resilient whilst promoting investment in the UK economy.