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Part IV Structural Regulation, 15 The UK Bank Ring-fencing Regime

From: The Law of Financial Services Groups

Charles H R Morris

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2021. All Rights Reserved.date: 20 September 2021

Bank resolution and insolvency

This chapter evaluates the new UK bank ring-fencing regime. At its simplest, the UK ring-fencing regime requires banks performing core retail banking activities—known as ring-fenced bodies or RFBs—to operate independently from, and to be shielded from the risks posed by, the wider financial services industry. Although the rules do not require the full separation of RFBs from other businesses, measures are imposed with the aim of ensuring the integrity and self-sufficiency of RFBs and their immediate sub-groups. The UK ring-fencing regime is therefore often described as comprising two elements: rules relating to the perimeter of the ring-fence and rules relating to the height of the ring-fence. The former refer to rules defining what must, can, and can only be done by a ring-fenced body or its sub-group. The latter refer to the degree and nature of the separation between ring-fenced bodies/sub-groups and other entities.

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