HM Treasury publishes Ring-Fencing review

On 18 May 2026, HM Treasury published the conclusions from its review of the Ring-Fencing regime (see here) (the “Review”). The Review had been initiated following the Chancellor’s indication that the Government intended to introduce “meaningful reform” to the ring-fencing regime to support growth in last year’s Mansion House speech. 

The Review conclusions, developed in close collaboration with the Bank of England, constitute a comprehensive package of reform proposals (the “Reform Proposals”). 

They are framed through the lens of “remodelling the regime to be more flexible and responsive to changes in the economy, financial markets and the wider prudential and resolution regimes” while retaining “the important financial stability protections”. To that extent they represent more wide-reaching conceptual changes than previous reforms, which were more targeted and limited in application. 

The Reform Proposals cover five key areas: 

• creating a more agile and proportionate ring-fencing framework;
• allowing ring-fenced banks (“RFBs”) to provide more products and services to support the UK economy, including by introducing a “New Growth Allowance” concept;
• addressing inefficiencies in how ring-fencing is applied to banking groups; • sharing resources and services more flexibly across the ring-fence; and
• maintaining proportionality. These are each addressed in more detail throughout our briefing note which can be read in full below.