CBI welcomes progress on implementing the ring-fence of retail banks

The CBI commented on the Government’s progress on implementing the ring-fence of retail banks.

Matthew Fell, CBI director for competitive markets, said: “Businesses want a financial system that is both stable and able to provide the full suite of products and services it needs to grow sustainably. The Government’s decision on what products to include within the ring-fence strikes a sensible balance between these two objectives.

“Making changes to ensure that simple options and normal trade finance activities are within the ring-fence is an important step to ensuring banks can continue to serve medium-sized businesses as they grow and expand into new markets.

“Trade finance has a crucial role to play if businesses are to meet the Prime Minister’s ambitious target for doubling exports by 2020, so it is good that it can be easily accessed through retail banks.

“Simple Options can, for example, enable firms to hedge their currency risk, contingent on winning a contract, so they are a useful risk management tool for businesses bidding for orders overseas.”