Euroweek in Association With: UK Capital Markets September 2013

EUrOWEEK In association with: UK Capital Markets September 2013

Serving up economic recovery

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Contributing editors: Lucy Fitzgeorge-Parker, Philip Moore Reporters: Nathan Collins, Andrew Griffin, Steven Gilmore, Foreword by the Economic Secretary to the Treasury Olivier Holmey, Hassan Jivraj, Hugh Leask, Stefanie Linhardt, 2 Sajid Javid: The UK’s economic plan is working Joseph McDevitt, Craig McGlashan, Tom Porter, Ravi Shukla, Michael Turner, Oliver West Macroeconomic Overview The UK economic revival: rhythm, or blues? Production manager: Gerald Hayes 4 • [email protected] Deputy production editor: Dariush Hessami Bank of England Profile Night editor: Julian Marshall 8 Communication will define Carney era at beefed up Bank Sub-editor: Tom Pumphrey Cartoonist: Olly Copplestone Interview With Sarah Breeden, Bank of England • [email protected] 8 ‘A banking licence is a privilege — banks must remember that’ Events & Project Manager: Sara Posnasky +44 20 7779 7301 London as a Financial Centre City faces taxing future despite fading crisis Advertising 12 Publisher: Oliver Hawkins +44 20 7779 7304 Deputy publisher: Daniel Elton +44 20 7779 7305 Infrastructure Financing Associate publisher: Henry Krzymuski +44 20 7779 7303 14 Financing UK infrastructure: all together now… and lift

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Directors: PR Ensor (chairman), The Viscount Rothermere bank finance (joint president), Sir Patrick Sergeant (joint president), CHC 37 Banks ready to reclaim their place in the markets Fordham (managing director), D Alfano, A Ballingall, JC Botts, DC Cohen, T Hillgarth, CR Jones, M Morgan, NF Osborn, UK Credits Roundtable J Wilkinson 39 Crisis over — now the hard work begins for UK credits Printed by Williams Press All rights reserved. No part of this publication may be Blue chip Companies reproduced without the prior consent of the publisher. While 46 UK corporates awash with capital raising options every care is taken in the preparation of this newspaper, no responsibility can be accepted for any errors, Order book for Retail Bonds (ORB) Roundtable however caused. 48 ORB at the centre of corporate financing shift © Euromoney Institutional Investor PLC, 2013 ISSN 0952 7036 MIDCAPS and SMEs 57 Banks are not the only fruit: firms seek new funding tools

UK Capital Markets | September 2013 | EUROWEEK 1 Foreword by the Economic Secretary to the Treasury UK: the economic plan is working by Sajid Javid, MP, Economic Secretary to the Treasury

he UK government is dedicated to increas- ulation to ensure we ing the nation’s competitiveness and have a safe and resil- maintaining London’s position as a world ient financial sector Tleader in the financial field. But we face that can compete sus- serious challenges. The economy is recovering from tainably in the global the most damaging financial crisis in generations. market; (ii) creating UK output fell by 7.2% from peak to trough. That is the right environment almost twice as deep as that experienced by the US for financial servic- and three times as deep as Britain’s recession in the es firms to trade and early 1990s. attract inward invest- Debt was at unsustainable levels. In 2010, total pri- ments and supporting firms to pursue high value vate sector debt had reached 470%. The government opportunities; and, (iii) incentivising banks to lend to ran rising deficits even at the peak of the boom. The the real economy, supporting SMEs and employment. UK entered the crisis with a structural deficit of more We are delivering necessary reforms to strength- than 5% of GDP, the highest amongst the G7. Subse- en the City and make it more resilient. We are quently the deficit soared and in 2010 the UK deficit implementing the recommendations of the Vick- was forecast to be the highest of any major economy. ers review through the Banking Reform Bill and we The historically high level of borrowing undermines have reformed the financial regulatory architecture fairness, growth, and economic stability. in the UK through the Financial Services Act. We are The UK government has implemented the econom- also working hard in Brussels to secure the best pos- ic strategy necessary to rectify Britain’s perilous mac- sible outcomes on a range of financial services dossi- roeconomic imbalances. The combination of fiscal ers, enhancing financial stability whilst protecting the responsibility and monetary activism assists the rebal- competitiveness of the financial services industry. ancing of the economy from debt-sustained activity In the Budget this year, the Government announced towards investment and exports. Our fiscal credibility the creation of the Financial Services Trade and Invest- has helped keep interest rates low and allowed the UK ment Board, which has been tasked to support the sec- authorities to pursue a strategy of monetary activism. tor in gaining market share abroad and creating the This includes measures such as the Funding for Lend- right environment to attract inward investments. The ing Scheme that has supported a dramatic improve- Board is now up and running and will identify trade ment in financial conditions. and investment priorities within the financial services Our unwavering commitment to deliver a sustain- sector and provide senior level steers and directions for able recovery is yielding results. The UK economy is joined up government and industry actions. turning a corner. Recent evidence suggests tentative signs of balanced, broad-based growth. The deficit A plan for sustainable growth has been cut by a third as a percent of GDP and the A key element of our economic plan is an ambitious structural deficit has been cut more than any major programme of growth-enhancing reforms to support a advanced economy. Private sector debt has fallen by sustainable recovery. Our plan focuses on tax competi- almost 40% of GDP since early 2010. For every pub- tiveness, business growth, workforce skills, and rebal- lic sector job lost, 3.2 have been created in the private ancing towards investment and exports. sector. Employment is at an all-time high. Finally, the Consistent with these aims, we are emphasising average of independent forecasts for 2013 GDP growth long-term investment in infrastructure by committing are now more than double the 0.6% official forecast to publicly fund a pipeline of specific projects worth from March. Britain is on the mend. over £100 billion by 2020. But the recovery is in its early stages, and we must We have brought forward the delivery of our com- remain vigilant. While the extreme risks in the euro mitment that the first £10,000 of income is free from area have been reduced, they do remain, and emerg- income tax. Increases already in place have saved a ing market economies have slowed as capital flows basic rate taxpayer £600 a year, rising to £700 next back to recovering advanced economies. We will not year. By April 2014, 2.7 million low income individuals become complacent about implementing our plan to under 65 will have been lifted out of income tax alto- repair and strengthen the UK economy. gether. In addition, we are boosting investment and com- Financial services: petitiveness through a major programme of corpo- stability and competitiveness rate tax reform, including by reducing the main rate The financial services sector in the UK accounts for of corporation tax from 28% to 20% between 2010 and 10% of our GDP, 12% of our tax revenue, half of our 2015. Companies that had left the UK are now bringing trade surplus, and employs over 1 million people — investment back home. two thirds of whom are outside of London. Financial So whether it’s helping keep interest rates low; services have a critical role in the recovery as a pro- repairing our banks; dealing with the deficit, or last- vider of credit and financial intermediary services to ing structural reforms to make Britain more competi- businesses and consumers. We are taking ambitious tive — the government is backing British business and actions along three strands to ensure that we have a creating lasting improvements in the living standards financial sector which can make significant contribu- of families. The economic plan is working and we are tion to sustainable growth: (i) reforming financial reg- committed to seeing it through. s

2 EUROWEEK | September 2013 | UK Capital Markets 2013 Morgan Stanley’s Leadership with UK Issuers spans Financial, Corporate and Sovereign Clients

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7679912_EW Tombstone Ad_vAW.indd 1 18/09/2013 14:13 Macroeconomic Overview

The UK economic revival: rhythm, or blues?

The UK economy seemed to shift into gear over the summer with improved data suggesting a recovery is underway. But, as Philip Moore discovers, the path back to boom times may prove anything but smooth.

The UK Chancellor of the recent Morgan Stanley analysis of Exchequer may have turned down “I’m not aware of productivity in the UK. If the Mor- an invitation to perform a duet anyone who gan Stanley prognosis is correct, it with Jeffrey, the R&B-singer with foresaw the speed should have significant implications whom he shares a surname, after with which the for the sustainability of the UK’s President Obama got his Osbornes economy seems to equity market, given that will sup- mixed up in June. But in the last be recovering” port rising corporate profits. Tell- few weeks, George Osborne may ingly, Morgan Stanley has recent- have been tempted to sing chirpily Jamie Dannhauser, ly lifted its year-end target for the in his bath, as one of his predeces- Lombard Street FTSE 100 from 7,000 to 7,170 — sors was famously reported to have Research suggesting there is scope for a rise done following the UK’s exit from of almost 10% over the next three the Exchange Rate Mechanism in months. 1992. has been the surprising strength In an unguarded moment, Chan- of the incoming data,” says Mela- Productivity problem cellor Osborne may even have been nie Baker, UK economist at Mor- Baker’s qualification about the pro- tempted to echo the same predeces- gan Stanley. That data, she adds, ductivity outlook is an important sor and point to the emergence of has recently led Morgan Stanley to point, because Bank of England gov- some green shoots of recovery. He revise its forecast for GDP growth ernor, Mark Carney gave a muted has, after all, had almost an embar- in 2014 from 1.4% to 2.4%, leapfrog- assessment of the outlook for pro- rassment of good news to digest ging the CBI’s forecast for next year, ductivity growth in August, forecast- recently, which began in June when which has recently been lifted from ing annual growth of 1.8% for the the IMF revised its growth forecast 2.1% to 2.3%. next three years, which is still below for 2013 from 0.7% to 0.9%. RBC is also forecasting growth its pre-crisis trend of 2.2%. “While The flow of good news acceler- of 2.4% in 2014. “The economy has even that modest productivity is not ated in August, when the Office turned the corner, and I expect the assured, it is hardly an aggressive of National Statistics (ONS), recovery to be sustainable,” says forecast,” said Carney. “It implies announced that second quarter Jens Larsen, chief European econo- that productivity reaches its 2008 growth came in at 0.7% rather than mist at RBC Capital Markets in Lon- level only in 2015. And it means that the 0.6% it estimated in July. In the don. “But the growth rate will still productivity doesn’t catch up any of same period, employment rose by not reach the levels we would have its current 15% shortfall relative to 80,000, with the private sector creat- regarded as sustainable before the its pre-crisis trend.” ing three times as many jobs as were crisis, which would have been in the “Our outlook is certainly not with- lost in the public sector, accord- range of 2.5%-3%.” out risks,” says Baker at Morgan ing to the Confederation of British Stanley’s Baker foresees sustain- Stanley. “If we’re wrong on the pro- Industry (CBI). Construction orders able growth underpinned by rising ductivity story, it changes the whole jumped by 20% between April and productivity without stoking much complexion of the UK recovery.” June. Activity and orders in the in the way of inflationary pressures. For the time being, however, the manufacturing sector are rising at “We see a virtuous circle developing consensus among economists is their fastest clip for 19 years. Retail in the economy with a simultaneous more upbeat than it has been for sales are up. So are exports. pick-up in demand, supply and cred- many years. Indeed, the marked It amounts to a cocktail of good it conditions,” she says, arguing that turnaround in the fortunes of the news that seems to have caught as it is largely a cyclical rather than a UK economy has given the Bank of most forecasters on the hop. “I’m structural phenomenon, productiv- England sufficient confidence to not aware of anyone who foresaw ity growth should accelerate as the stick at £375bn of quantitative eas- the speed with which the economy economic recovery gathers pace. ing (QE), rather than to twist for an seems to be recovering,” says Jamie “This suggests that there is less additional £25bn. Dannhauser, director in the research need to worry about the risks of The revival of the economy, how- group at Lombard Street Research in underlying inflationary pressures ever, has also given rise to increas- London. building in a recovery, compared ingly vocal misgivings about some Others agree. “The main theme with our previous concerns,” says a of the policies that were originally

4 EUROWEEK | September 2013 | UK Capital Markets 2013 Macroeconomic Overview

scheme wouldn’t get them very the Funding for Lending scheme “We see a virtuous far, given a median house price in (FLS) introduced in August 2012 to circle developing in the borough of £965,000, accord- boost lending to households and the economy with ing to the This is Money website. In companies, is mixed. According to a simultaneous the northern towns of Burnley and the Bank of England’s latest num- pick-up in demand, Stoke, by contrast, it is a little under bers on the FLS, in the second quar- supply and credit £64,000. ter of this year 18 participants made conditions” More broadly, however, the Help drawdowns of £2bn, bringing the to Buy idea has been lambasted by total of outstanding drawdowns Melanie Baker, those — even within the UK’s govern- under the scheme to £17.6bn from Morgan Stanley ing coalition — who argue that it is 28 lenders. That is a far cry from the likely to engender an unsustainable £70bn that was originally set as the house price boom and even a minia- upper limit when the scheme was designed for a patient in intensive ture US-style sub-prime crisis. announced, and perhaps explains care. why the programme was modified to Some of these stimulants, it is Housing help incentivise banks to increase their argued, are looking less and less But Baker says that Morgan Stan- lending to SMEs. appropriate now that the patient is ley is positive on the Help to Buy In its most recent update on FLS, out of bed and threatening to start scheme. “We think there will be a the Bank reports that “there is evi- cart-wheeling down the corridor. supply response that will be big- dence that the price and availabil- The fiercest criticism has been ger than the market expects, and ity of lending to businesses has reserved for the government’s Help we also believe it could ultimately improved since the scheme began to Buy scheme announced in the act as a powerful macro-prudential and this trend has continued in March 2013 budget. Designed to defence against future bubbles,” she recent months.” Lending still has kick-start demand in the housing says. some way to go, however, before it market, this three year scheme is Morgan Stanley has estimat- comes close to pre-crisis levels. Hav- divided into two parts: an equity ed that, encouraged by the initia- ing risen by 16.8% in 2007 and 18% loan component and a rather more tive, the UK could see a 30%-40% in 2008, lending to UK businesses controversial initiative that will pro- increase in new housing starts by slipped back by 1.8% in 2009, 7.1% in vide some £130bn of guarantees 2015 on 2012’s levels. 2010, 3.3% in 2011 and 3.1% in 2012. for up to 15% of loans for purchas- Trevor Williams, chief economist, “Although there are tentative signs es of homes worth a maximum of Lloyds Bank Commercial Bank- that the pace of bank balance sheet £600,000. ing, is also relaxed about the impact restructuring may be lessening, One of the reasons the scheme is that the scheme may have on house credit flows remain moribund,” Bar- regarded by many as hare-brained prices. “House price inflation in real clays cautioned in a recent note. is because it doesn’t appear to take terms is still significantly below its It may not have generated the into account wild differences in peak, and in some parts of the coun- volumes that its most enthusias- affordability across the UK’s wonky try it is even declining,” he says. tic advocates were hoping for at its property market. Most residents in “The national average is distorted launch, but economists say the FLS the posh parts of London like Kens- by the high prices in London, but has had a beneficial effect on credit ington and Chelsea don’t need help the picture is more mixed than the conditions in Britain. to buy property or anything else. headlines suggest.” “One of the reasons that bank But if they did, the government’s Opinion about another stimulant, funding costs are so low is that they have had access to FLS,” says Larsen at RBC. “The reason banks are going UK forecast summary through such an extensive peri- 2012 2013 2014 2015 od of balance sheet restructuring (Estimated) (Estimated) (Estimated) is not shortage of liquidity. Capital Real GDP (%Y) 0.2 1.4 2.4 2.1 requirements and pressures on prof- Private consumption 1.1 1.5 1.6 1.8 itability have been the main con- Government consumption 2.8 1.6 -0.6 -1.5 straints on bank lending.” Gross fixed investment 0.5 -2.7 5.6 5 The recent rise in Gilt yields is a Contribution to GDP (pp) reflection of a range of influences, Final domestic demand 1.4 1 1.7 1.5 led by the global response to taper- Net exports -0.6 0.8 0.4 0.5 ing in the US. But economists say Inventories -0.6 -0.3 0.3 0 longer term rates in the UK may also Unemployment rate (% labour force) 7.9 7.7 7.5 7.3 reflect a view that monetary tighten- Current account (% GDP) -3.8 -2.7 -2.5 -1.9 CPI (%Y) 2.8 2.7 2.7 2.3 ing may be required sooner than had Policy rate (eop, %) 0.5 0.5 0.5 1 been expected earlier this year. General government balance (% GDP) 5.5 6.1 5.2 4.4 This is why some are even ques- General government debt (% GDP) 90.1 93.5 96.2 97.8 tioning the suitability of the new governor’s signature tune, forward Source: ONS, Bank of England, Morgan Stanley research estimates guidance, given the apparent volte-

UK Capital Markets 2013 | September 2013 | EUROWEEK 5 Macroeconomic Overview

“The growth rate modest, it would mean that well make a recovery.” will still not reach over 750,000 new jobs would need The strong performance of the the levels we would to be created, with the responsibility last few months has only succeeded have regarded as for doing so falling squarely on the in clawing back some of the losses sustainable before shoulders of the private sector. That of recent years, making for unflat- the crisis, which will be a tall order. tering comparisons between the UK would have been The third, Carney warned, is that and its main trading partners. “Con- 2.5%-3%” a recovery in growth does not nec- struction activity is still 16% below essarily filter through to faster job its pre-crisis peak and production Jens Larsen, creation. That may be a legitimate is 10% below its peak, while ser- RBC Capital caution. Witness concerns over what vices have just got back to where Markets some have called the jobless recov- they were in 2008,” says Williams at ery in the US. Lloyds Bank. “As for the economy as face in the UK’s economic fortunes. Economists appear to agree with a whole, it is still about 3% below its Forward guidance, or ‘conditional Carney that a rapid decline in unem- 2008 peak, compared with 5% above commitment’, refers to the com- ployment towards the 7% level looks the 2008 level in the US and 4% mitment of the Bank of England’s unlikely. “Unemployment has been higher in Germany.” Monetary Policy Committee (MPC) roughly unchanged for the last four One explanation for the weakness to holding policy rates at 0.5% until years now,” says Williams at Lloyds of the UK’s recovery, Williams adds, GDP growth accelerates to the point Bank. “One of the reasons for believ- has been the deleveraging of house- where it brings the UK unemploy- ing unemployment is unlikely to holds in recent years. ment rate below 7%. fall to 7% is that one of the conse- “At its peak, UK household debt quences of having stable or growing was approaching 180% of GDP,” It’s a knockout employment at a time of falling or he says. “It has now come down There are, however, three knockout stagnant output is that labour pro- to about 140%, which is a sharp- clauses that would trigger a tighten- ductivity plummets. As output picks er fall than in any other industri- ing in monetary policy before the up, firms will aim to generate more alised nation. There is now scope 7% target is reached. All bets would productivity from their existing staff for households to start spending be off if the MPC reckons inflation before they start thinking about again, which is partly why recovery looks like reaching 0.5% above tar- adding to their labour force.” is underway, although some would get over a 10-24 month period, or if One extreme manifestation of argue that debt is still uncomfort- medium term inflationary expecta- this pursuit of productivity gains ably high.” tions become dislodged. from companies’ existing labour Monetary tightening could also be resources has been the increase in brought forward if the Bank of Eng- the number of employees working “The economy is still land’s Financial Policy judges that on zero-hour contracts, which the 3% below its 2008 low rates pose a threat to financial Office of National Statistics (ONS) peak, compared stability by fuelling asset bubbles or puts at 250,000. with 5% above the excessive leverage. There are several reasons that 2008 level in the For now, none of these knockouts Carney is right to be cautious US and 4% higher in look imminent, but some say that about growth and employment, Germany” the credibility of forward guidance say economists, particularly when is already coming into question. it comes to the UK’s main trading Trevor Williams, “Recently markets haven’t been buy- partners. Another dip in European Lloyds Bank ing into the guidance story, which is economic performance could be a worry,” says Dannhauser at Lom- especially damaging. bard Street Research. “My hunch The weakness of the recovery to is that over the next few months UK’s ‘lost year’ date comes in spite of the fact that the MPC will try hard to talk down Another is that although the govern- government spending has risen, rates and the pound and contain the ment has made considerable politi- meaning that the economy would upward move in yields.” cal capital out of the recent encour- have been weaker without it. That Certainly, in his first speech as aging data, the recovery is a fragile does not bode well for cuts set to governor, delivered at the end of one which comes from a very low take effect in the near future. August, Carney gave three reasons base, following what the Institute “We shouldn’t underestimate how why he still believes it will be a for Fiscal Studies (IFS) describes as material the public sector cuts that while before unemployment reaches a “lost year” for the UK economy in still have to kick in will be,” says the 7% threshold which will trigger a 2012. Dannhauser. “Putting the debt ratio rise in rates. The first, he said, is that “The marked improvement in on a sustainable course is going to the Bank’s projections for growth are recent economic performance is require very large fiscal tightening. “solid not stellar”. no reason for George Osborne to So the big picture is that the public The second is that although a fall declare victory,” says Dannhauser at finances still have years and years of from the current level of around Lombard Street Research. “One or austerity to go through before they 7.7% to 7% may look achievably two quarters of strong data does not are back into shape.” s

6 EUROWEEK | September 2013 | UK Capital Markets 2013 Welcome to ORB

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2013-09-12 Advert.indd 1 16/09/2013 11:45 Bank of England Profile

Communication will define Carney era at beefed up Bank

The Bank of England has been shaken up. A new governor with new targets, a new monetary policy focus, and a new means of communicating them is now in charge of a central bank with new powers. Philip Moore assesses Governor Carney’s first few months in charge and the Bank’s prospects of success.

Search for Mervyn King in You- his audience that Tube and you are presented with a the Bank’s man- choice between a speech by the former date of maintain- governor of the Bank of England and ing a 2% inflation highlights of a darts match between target, remained his namesake and an opponent named unchanged and Dean Winstanley. Search for Mark had been recon- Carney and you are offered a string of firmed by Chan- interviews and speeches broadcast on cellor Osborne in a range of television channels. March. Granted, some of these date back to The message the new governor’s tenure at the Bank seems to be perco- of Canada. Granted, too, not all of the lating through. In clips are complimentary. They include the August edition ill-tempered tirades against a mone- of the Bank of Eng- tary policy that some believe will con- land/GfK Inflation demn UK pensioners dependent on Expectations sur- Move over Mervyn: The Bank of England’s new governor bank savings to penury for many years. vey, carried out just Mark Carney relaxes at a music festival earlier this year Whether or not the British elector- after the release of © Chris Eades / Daily Mail ate approves of Carney’s approach to the Bank’s inflation its 2013 Q1 Quarterly Bulletin. “Fail- monetary policy is scarcely the point. report, only 29% of households said ings in pre-crisis arrangements have More important is that the new gover- they expected rates to rise in the next prompted the government to intro- nor has brought a refreshing openness 12 months, which is down from 34% in duce wholesale changes to the UK reg- to an institution that has historically May and is the lowest since November ulatory landscape.” been stereotyped — rightly or wrong- 2008, at the height of the crisis. This reform has given the Bank new ly — as stuffy, distant and insensitive regulatory powers, with responsibil- to public opinion. It is impossible to Regulatory shake-up ity for supervision from a prudential imagine his predecessor, for example, While Carney’s forward guidance may and conduct perspective passing from being described as “chillaxing” in a have been unfortunately timed, it has the now defunct Financial Services “lilac polo shirt, crumpled shorts and been impeccably managed and clearly Authority (FSA) to the new Prudential suede loafers”, as the Daily Mail did delivered. “It may have made more Regulation Authority (PRA) and Finan- when it spotted Carney and his wife at sense if it had been implemented after cial Conduct Authority (FCA). The PRA a musical festival in August. the first round of quantitative easing in was quick to bare its fangs, identifying “Carney’s openness towards the 2010,” says Jens Larsen, chief Europe- a capital shortfall of £12.8bn at Bar- media has surely been very helpful an economist at RBC Capital Markets clays when it imposed a 3% minimum in getting his message about the rela- in London. “The strong macro data leverage ratio on Britain’s eight largest tionship between interest rates and and rising long term bond yields may banks and building societies. The FCA, unemployment across to companies make monetary policy difficult at the then slapped a £138m fine on JP Mor- and households,” says Melanie Baker, moment, but let’s reserve judgement gan in September. UK economist at Morgan Stanley. until there is more clarity on how suc- The PRA’s zealousness on leverage, Critically, Carney appears to have cessful it has been in influencing inter- the Bank insists, is in no way incon- chosen his words to reinforce the mes- est rates.” sistent with supporting economic sage that monetary policy should be If it is too early to digest the impact recovery. As Carney said in August, used to nurture growth. “The Bank of Carney’s arrival on the UK econ- “some argue that the repair of banks’ of England’s task now is to secure omy, it is also probably too soon to balance sheets holds back economic the fledgling recovery, to allow it to assess the effects of the shake-up recovery because it causes banks to develop into a period of sustained and in the regulatory environment that cut back their lending. The reality is robust growth,” he said in August. “We came into force in April. “The Bank the opposite: where capital has been aim to get there in part by reducing the of England is experiencing its most rebuilt and balance sheets repaired, uncertainty that has held back growth.” important institutional and function- banking systems and economies have At the same time, he reminded al changes in a generation,” it said in prospered.” s

8 EUROWEEK | September 2013 | UK Capital Markets 2013 Interview With Sarah Breeden, Bank of England

BofE’s Breeden: ‘A banking licence is a privilege — banks must remember that’

Sarah Breeden is head of the Market Sectors and Interlinkages Division in the Financial Stability Directorate at the Bank of England. The division is responsible for assessing and identifying ways of reducing risks to the stability of the UK financial system that arise in financial markets and the real economy. Having led the Bank’s work to support the transition of prudential regulation of banks and insurance companies from the Financial Services Authority (FSA) to the Bank of England, Breeden is well positioned to discuss the impact of regulatory change on the