Lord Sharkey – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Lord Sharkey on 2016-07-13.

To ask Her Majesty’s Government, further to the Written Answer by Lord O’Neill of Gatley on 12 July (HL883), what steps they are taking with regard to the withdrawal of banking services to encourage banks to take a risk-based approach and to ensure that the measures they take are effective and proportionate; and what assessment they have made of the extent to which that encouragement has been effective.

Lord O’Neill of Gatley

The government engages regularly with the banking industry and those affected by de-risking in order to facilitate communication. The aim of this is to improve banks’ understanding of how affected sectors work and to improve affected sectors’ understanding of how they can best meet the banks’ requirements for providing services. This process has led to the British Bankers’ Association developing tailored ‘access to banking’ guidance for affected sectors.

The government continues to work with the Financial Conduct Authority (FCA), who recently published research into the withdrawal of banking services. The FCA are also working with the banking industry to lessen the damaging effects of de-risking without constraining banks’ commercial freedom.

Internationally, the UK has been instrumental in making de-risking a priority for the G20 and the Financial Stability Board. The government is working with the Bank of England and the FCA on internationally agreed guidance to financial institutions that will clarify regulatory expectations, making their responsibilities clearer to allow a more risk-based approach and better appraisal of risks.