PRA Chief Warnsโ Against Relaxingโฃ Bank Capital Rules amid โGlobal risks
LONDON – Sam Woods, head ofโ the โPrudential Regulationโฃ Authority (PRA), cautioned against easing capital rules for UK banks, despite acknowledging a generally optimistic โoutlookโ for the sector. Speaking publicly, Woods highlighted a “dangerous place” in the global geopolitical landscape, citing relentlessโ cyber attacks and the potential for disruption from poorly governed new technologies.
Woods expressed concern over vulnerabilities in the wider financial โคsystem, specifically pointing to “opaqueโ and complex private lending by non-banks,” recent “cracksโฃ emerging in US credit,” and the potential forโฃ an “AI bubble.” โฃHe โฃstressed that a resilientโ banking system and the profit motive can coexist, butโข only with appropriate safeguards.
The PRA chief’s comments come as Chancellor Rachel Reeves seeks a replacement for Woods, who is set to โdepart in June 2026, and is reportedly consideringโ an “outsider” for the role. โขReeves has โคpublicly criticized โexisting regulationโ as a “boot onโ the โneck of businesses,” and has challenged theโฃ PRA to support โthe government’s economic growth agenda – a pressure echoed by recent criticism fromโฃ the fintech industry, which labelled banking watchdog โregulation as “logic-defying” and “excessive.”
Despite theseโค global โheadwinds, Woods โขindicated theโ UK banking sector has โค”acclimatised” and โis in a strong position, further suggesting the nation is now able to “admire the view from our position outside the EU and focus more on seizing the opportunities Brexitโฃ provides.”
