A group of challenger banks has written to the Treasury select committee to shine a light on the opportunity Brexit brings to cut banking red tape.
The letter, which is signed by the chief executives of Aldermore, Charter Savings, Hampden and Co, Metro Bank, OneSavings Bank, Secure Trust Bank and Shawbrook, is dated 30 June. However, it was only published by the committee today.
"The EU referendum result, once implemented, means government and the Bank of England will have the discretion to determine which aspects of legislation derived from the EU they wish to be maintained in the UK and which they wish to reform," the letter read. "We hope that will result in a more proportionate approach to the regulation of smaller banks, particularly in respect of capital.
"This will help smaller banks and building societies compete more effectively and provide more credit to the economy which will be useful especially should the dominant incumbents reduce their lending appetite in the post-Brexit environment."
Commenting on the letter, Andrew Tyrie, chairman of the Treasury committee, said:
Brexit poses risks; it may also create opportunities. Current EU legislation could be placing smaller banks at a disadvantage. This is because it risks imposing a "one size fits all" approach to banking regulation.
Finding ways to improve competition in banking by opening up the field to challengers is not a new issue. In May, the Competition and Markets Authority (CMA) revealed their recommendations on the issue.
However, the challenger banks along with industry experts later expressed their dismay with the CMA's work, with Enlightenment Economics founder, professor Diane Coyle, telling MPs in a committee hearing: "I could weep with disappointment. This opportunity looks like it is being squandered."