SVB fallout to slow banking deregulation push as part of Edinburgh Reforms

‘Politically unfeasible’

The collapse of Silicon Valley Bank might cause the UK’s regulators to resist calls for de-regulation, while pushing the government to reconsider introducing more risk into the system, financial regulation experts have said.

As part of the UK Government's Edinburgh Reforms, Chancellor Jeremy Hunt announced last December that it would consult on reforms of the ring-fencing regime for banks in mid-2023 with the objective of improving its functionality, while moving some firms out of it entirely. Ring-fencing, introduced in the aftermath of the 2008 global financial crisis, separates a bank's retail operations from its investment banking division in order to safeguard the core retail division from external shocks. It covers banks with deposits totalling more than £25bn. The UK Government has proposed increas...