The regulators could create a nursery for new banks to help them deal with rules on risk and capital, the director of risk and research policy said, in a bid to tip the table more in favour of new lenders.
New rules on bank licences have made it easier than ever to set up a lender, he told the Treasury Select Committee.
The “catch 22”, where banks had to raise capital to get a licence, but could not get capital without the licence, is gone.
But Woolard said the big banks’ market share is not yet declining.
“There is a large share among a very small number of major banks and it is a relatively stable position,” he said.