Banking reform: The limits of prudence

Speaker(s): Ian Plenderleith (Former Bank of England)

Chair: Robin McConnachie (Oxford Analytica)

Convenor: Adam Bennett (St Antony’s College, Oxford); David Vines (Balliol College, Oxford)

 

Since the financial crisis, regulatory requirements for banks have been considerably increased – in terms of capital, liquidity, risk management and governance standards and the depth of regulatory oversight. This intensification of regulation was undoubtedly needed and has materially strengthened the soundness and resilience of the banking system. Substantial progress has also been made in two consequential areas that needed remedial attention: the moral hazard of “too big to fail”; and banking-type activities outside the regulated framework. But what should be the limits of regulation? At what point does regulation begin to constrain competition and innovation in banking services to the point where banks are less able to provide the services to the wider economy which are their basic purpose?

Ian Plenderleith is Chairman of Morgan Stanley International and of BH Macro (a listed hedge fund), and a Director of various Sanlam subsidiaries in London. Previously, his main career was in central banking - at the Bank of England (1965-2002), where he was Executive Director responsible for market operations and a member of the Monetary Policy Committee, and at the South African Reserve Bank in Pretoria (2003-2005), where he was Deputy Governor and a member of the South African Monetary Policy Committee. He has an MA (Lit Hum) from Christ Church, Oxford and an MBA from Columbia Business School, New York.