Sam Woods: Stylish regulation

Speech by Mr Sam Woods, Deputy Governor for Prudential Regulation of the Bank of England and Chief Executive of the Prudential Regulation Authority (PRA), at the UBS Financial Institutions Conference, Lausanne, 16 May 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I met recently with the head of a large foreign bank, who was in London following a visit to the continent. He had been advised by some of our EU colleagues that with the departure of the UK from the EU, the British public would become alarmed at the size of the financial sector relative to the size of the economy and would therefore demand ever-tougher financial regulation in order to assuage their sense of unease. Thus it was put to him that it would be sensible for him to move more of his operations to Paris, Frankfurt or Dublin, where things would be easier.

A noisy pro-Brexit demonstration taking place in the next door street seemed to support his case. But I told him that I thought it somewhat unlikely that the public would take much interest in the size of the financial sector unless it blew up again, and that ten years on from the financial crisis we have largely implemented the reforms and are moving into more of a business-as-usual phase. I said that we more often heard the opposite concern from EU officials in the context of Brexit - that having escaped the "shackles" of EU regulation we would embark on a course of weakening financial regulation in a way that makes the financial system less resilient. This, needless to say, would be anathema to the Prudential Regulation Authority and to all of us who have spent the last decade repairing the financial system.