In his summary of the FCA’s latest annual report, Martin Wheatley explained how the FCA had been working with the Prudential Regulation Authority (PRA) to give firms more tailored support. The regulators are looking at ways to ease up on certain requirements to free up competition in the banking sector.
Since March 2013, the FCA and PRA have been working to implement proposed changes set out by the Bank of England and the FCA’s predecessor, the Financial Services Authority. The changes included reforms to the authorisation process for bank applicants and a shift in the approach to the prudential regulation of banking start-ups.
In July 2014, the first year since the changes, the FCA noted “a substantial increase in the number of firms discussing the possibility of becoming a bank.”
Wheatley said: “Working with the PRA, we are giving firms who want to enter the market more tailored support as well as lowering the capital and liquidity requirements and granting authorisation where they have a developed business plan and key senior managers in place.
“It brings certainty for these firms and as a result 14 new banks have been authorised in the UK since 2013. Another 20 are in the pre-application stage.”
Just last week, online-only retail bank Atom secured its banking license, which said it had big plans for the intermediary mortgage market.