Friday 29 Mar 2024
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LONDON: Barclays plc chairman John McFarlane is considering an acquisition to help adjust faster to rules requiring banks to separate consumer operations from riskier trading units, a person with knowledge of the matter said.

Under McFarlane, who assumed the role of acting chief executive officer after firing Antony Jenkins last week, Barclays is looking into buying an entity with a banking licence to help meet the ring-fencing rules, said the person who asked not to be identified because the plans are private. The bank may also apply for a new banking licence with the Prudential Regulation Authority (PRA), according to the person.

The United Kingdom’s largest lenders have been exploring strategies to meet the new rules set to take force in 2019. The PRA, a unit of the Bank of England, is requiring lenders with more than £25 billion (RM147 billion) of deposits to erect so-called firebreaks between their consumer operations and investment banks. The ring-fencing regulations seek to ensure that core services, such as those handling deposits and payments, are held separately within the company so that they’re protected if riskier investment-banking divisions incur losses and have to be shut down.

Barclays has been weighing how best to organise its businesses and acquire a bank licence for its separated operations as its seeks to comply with the rules. The Financial Times earlier reported the bank’s consideration of a takeover to speed that process. — Bloomberg

 

This article first appeared in The Edge Financial Daily, on July 14, 2015.

 

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