FSA 'to make it easier for new British banks'

25 March 2013

Newcomers to the British banking system are set to benefit from improved conditions following the announcement of numerous regulatory reforms this week.

Over the next few days, the Financial Services Authority (FSA) is expected to unveil new plans that will make it easier for new financiers to be set up and challenge their larger, more established rivals.

This forms part of the regulator's plan to improve the level of consumer choice and competition in the UK's financial sector in the aftermath of the global economic slump.

It is thought the FSA will go about achieving this objective by relaxing the rules concerning liquidity and capital for such institutions.

For instance, for the first three years after they have been established, these firms will be permitted to hold just half the amount of capital their bigger counterparts are required to have in reserve.

In addition, the FSA is to make it simpler and quicker for start-up lenders to get hold of a banking licence.

By Tony Aynsley

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