UK banking system is heading for reform

Those with banking and finance jobs in the UK may experience significant changes within their organisations sooner than they think.

The City is heading for reform; and a recent report by international credit rating agency Standard & Poor’s has put pressure on the powers that be to speed up the process.  

Britain’s banking industry was recently downgraded by S&P. Its credit profile dropped by one tier to Group 3 out of the agency’s 10 Banking Industry Country Risk Assessment (BICRA) groups.

In an interview with the Guardian, shadow Treasury Minister Mark Hoban said the news was disappointing, but added that it heralded “the need for reforms to the banking sector so that we don't repeat the mistakes of the last decade”.

“The plans set out in our white paper, From Crisis to Confidence: A Plan for Sound
Banking should help restore the reputation of the UK banking sector,” he said.

It seems as if Standard & Poor’s shares the minister’s point of view. 

“The UK banking industry is likely to undergo profound regulatory and structural changes over the next several years.

“If, in our view, these changes render the industry less prone to excessive credit expansion and more resilient to economic shocks, we could raise the UK's BICRA classification,” a spokesperson for Standard & Poor’s said.