James Proudman: From construction to maintenance - patrolling the ring-fence

Speech by Mr James Proudman, Executive Director of UK Deposit Takers Supervision of the Bank of England, at the Cass Business School, London, 26 November 2018.

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

Central bank speech  | 
27 November 2018


It is a great pleasure to be here again at the Cass Business School, and I am very grateful to the Associate Dean for inviting me. In fact, Andrew and I have quite a lot in common. We share a birthday, for a start, and a

home county (Hampshire). For a while, we also used to share an office, back in the far off days before the financial crisis, when - as young(ish) economists - we used to debate the relevance of the 'corporate veil' for

determining macroeconomic outcomes. Nowadays, we don't discuss the corporate veil so much as the banking ring-fence, and that is the focus of my speech tonight.

A decade on from the financial crisis, one of the largest ever reforms to the structure of the UK banking industry is coming into force. By 1 January 2019, the largest UK banking groups must have implemented the

'ring-fencing' - or separation - of their UK retail business from their international and investment banking operations. This means that the core banking services on which retail and small business customers depend

should not be threatened should things go wrong in wholesale financial markets or the global economy.