The House of Lords Financial Services Regulation Committee today
invites submissions to its new inquiry into the growth of private
markets in the UK following reforms introduced after the 2008
financial crisis.
The committee will focus on:
- Whether the regulatory capital and liquidity reforms
introduced after 2008 have reduced banks' ability or willingness
to lend, pushing financial activity away from the banking sector
and towards private markets.
- How much visibility the Bank of England has on the size of
these private markets, their interconnections with the banking
sector, and any potential spillover risks.
The committee is seeking evidence on the following questions:
- Has bank lending to the real economy in the UK reduced as a
proportion of the total volume of finance provided annually since
2008? If so, to what extent can this change be attributed to the
reforms to the UK's regulation of bank capital and liquidity
requirements? To what extent has any reduction led to an increase
in finance by private markets?
- What interconnections exist between the UK's banking sector
and private markets? How have these interconnections changed
since 2008, and how do you expect them to continue to develop?
- What are the implications of the growth in private markets,
and interconnections with the wider financial services sector,
for lending to the real economy and the UK's financial stability?
- How transparent are the valuations, price discovery
mechanisms, and structure of ownership of assets adopted by
private markets? Does the Bank of England have sufficient
visibility in non-bank finance, and what changes, if any, should
be made to address this?
- Are there systemic risks that the Bank of England should be
aware of regarding non-bank financial intermediation? If so, how
can these risks be mitigated?
- How has demand for finance from businesses changed since
2008, and how do you expect this will develop?
- How has the regulation of bank capital and liquidity
requirements affected the ability and willingness of banks to
provide lending to the real economy? Are there disincentives in
regulation that inhibit businesses' ability and willingness to
access finance through banks?
- To what extent do private markets have a competitive
advantage over the banking sector to provide finance to
businesses; if so, why? To what extent are any competitive
advantages regulatory in nature?
- What, if any, reforms to bank capital regulation could be
implemented to increase the risk appetite of the banking sector
to provide lending to the real economy?
- What can the UK learn from other jurisdictions, in particular
the US and the EU?
Commenting on the launch of the new inquiry, of Drumlean, Chair of the
Financial Services Regulation Committee, said:
“Our previous inquiry heard evidence that the regulatory capital
and liquidity reforms introduced after the 2008 financial crisis
may have limited bank lending into the real economy.
"We have launched this inquiry to determine whether these reforms
have disincentivised banks from lending to crucial areas of our
economy, such as to SMEs and infrastructure projects, and whether
this has driven an increase in lending from private markets.
"We will explore the connections between the banking sector and
private markets to understand how proportionate regulation can
ensure financial stability and increase the supply of lending to
the real economy.”
The deadline for the submission of written evidence by
midday on Thursday 18 September 2025.
Read the call for evidence
to find out how to submit evidence.
