<div id="readability-page-1">  <p><time datetime="2026-05-16T09:19:56+01:00">    Saturday 16 May 2026 9:19 am  </time>      <span> | </span><span> Updated: </span>   <time datetime="2026-05-16T09:20:06+01:00">    Saturday 16 May 2026 9:20 am  </time></p>         <div>                                                                                                                 Add as a preferred        source on Google                        </div>    <figure>    <div>       </div> <img width="742" height="495" src="https://imageproxy.pbkrs.com/https://www.cityam.com/wp-content/uploads/2024/08/HSBC-1200x800-2-1.webp/query-dz03NDI?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://www.cityam.com/wp-content/uploads/2024/08/HSBC-1200x800-2-1.webp/query-dz03NDI"/>  <figcaption>Reeves will shake up the ring-fencing regime</figcaption> </figure> <p>The Treasury is set to unveil a sweeping overhaul of the ring-fencing regime next week, in a bid to protect depositors at the UK’s biggest retail banks, as ministers scramble to boost economic growth.</p><p>According to reports in Sky News, Chancellor Rachel Reeves has signed off plans aimed at unlocking billions of pounds of additional lending capacity at five high street giants.</p><p>Barclays, HSBC, Lloyds Banking Group, Natwest and Santander UK will all be subject to the rules.</p><p>Both government and industry figures described the changes as a move to abolish the most significantly regulatory burden imposed in the UK following the 2008 banking crisis.</p><h2 id="h-changes-to-the-regime">Changes to the regime</h2><p>The ring-fencing regime forces large banks to separate retail and SME banking operations from riskier investment and international banking in a bid to prevent retail operations from global financial shocks.</p><p>But both industry and government critics have argued the rules stifle economic growth and damages competitiveness by tying up capital that could be loaned to stimulate growth.</p><p>The rules are expected to be positioned by Reeves as an offering to boost  growth while not compromising the UK’s financial stability or depositor protection.</p><p>Under the proposals, which have been the subject of an industry wide lobbying push over the last year, banks will be able to conduct a larger proportion of their activities within safer, ring-fenced operations than before.</p><p>This will include lending to public financial institutions including the British Business Bank and the National Wealth Fund, as well as other potential infrastructure-oriented projects.</p><h2 id="h-appeasing-banks">Appeasing banks</h2><p>Labour are scrambling to appease banks and boost growth to salvage its electoral prospects, while institutions are bracing for a potential soft-left leader who could raise taxes.</p><p>The banking sector narrowly evaded a tax increase in last year’s Autumn Budget after chancellor Rachel Reeves sought reassurance that they would boost lending in the UK and publicly support her fiscal plans.</p><p>A boost to profits among some of the UK’s biggest banks has led to calls from the Labour left to raise these levies.</p><p>Former deputy prime minister Angela Rayner, who is among the favourites to succeed Starmer, has long been part of these calls.</p><p>Last year she proposed increased the “bank surcharge to five per cent” in a bid to raise an estimated £1.5bn a year.</p> </div>

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<p>The UK Treasury plans to overhaul the ring-fencing regime to protect depositors at major retail banks and stimulate economic growth. Chancellor Rachel Reeves aims to unlock billions in lending capacity for Barclays, HSBC, Lloyds, Natwest, and Santander UK. Critics argue the current rules hinder growth by tying up capital. The proposed changes will allow banks to engage more in safer, ring-fenced operations, including lending to public financial institutions and infrastructure projects.</p>

Reeves to overhaul ring-fencing regime in a bid to boost the UK economy