FOREIGN banks will have to meet tough new criteria if they want to serve British high-street customers, under plans announced by the Bank of England this morning.
The Bank’s prudential regulatory authority (PRA) wants to make sure banks can continue to serve customers even if the entity suffers a severe crisis.
If the rules are implemented successfully, the PRA hopes to prevent a repeat of the chaos when Icelandic banks in the UK failed.
The proposed rules would apply to non-European banks’ branches in the UK, which will only be allowed to open if they come from a country where the rules are equivalent to those in Britain.
The PRA will scrutinise the type of activity the bank wants to undertake and demand the parent bank considers how its UK operations would continue running in the event of a collapse.