UK to Scrap Parts of Ring-Fencing Rules to Boost Lending

The UK government revealed plans to scrap some of the ring-fencing regime that forces the separation of large banks’ retail and trading arms, a move that Chancellor of the Exchequer Rachel Reeves said would unlock extra financing for British firms.

Banks will be given a so-called growth allowance to allow them to “use a limited proportion of their balance sheets more flexibly,” the Treasury said in a statement on Monday. The changes could release as much as £80 billion ($107 billion) of extra funding for UK firms, the Treasury said, without saying how that figure was calculated.