Bank of England’s deputy governor warns financial sector of crackdown

Bank of England Deputy Governor Sam Woods said that Britain’s financial sector could face a crackdown by regulators seeking to enforce their rules more tightly.

“I think it’s possible that as we come out of the reform phase, and enter a phase where we’re defending the reforms that have been put in place, that you may see more enforcement activity,” Woods told the Telegraph newspaper.

Woods, who is the head of the Prudential Regulation Authority (PRA), the BoE’s banking supervisory arm, also said the regulator wouldn’t necessarily be hostile to consolidation in the banking sector, according to The Telegraph report.

“We approach these things with caution, we’d have to be sure it made sense for the resulting entity,” he said.

“It’s been quite striking to me that really we’ve only had that one consolidation [in banking] – Virgin Money and Clydesdale. The possibility of others seems to me quite relevant and would not be problematic in principle.”

Woods, who was initially in the frame to replace Mark Carney as the British central bank governor, said he will have an eye on the job “next time around.” Andrew Bailey, chief executive of the Financial Conduct Authority, will succeed Mark Carney as the BoE’s governor on March 16.

source: Reuters