Entrepreneurs looking to expand their business presence across the pond may need to note the changing laws that could impact their presence and banking options in the United Kingdom. While investors may be well-versed with banking trends and regulations at home, having a firm grasp on international banking options overseas is essential to any expanding firm looking to grow in foreign markets.
New legislation may regulate UK banks soon
Finance minister George Osborne has announced new regulations to ensure large banking institutions will be broken up if they fail to comply with risky investment guidelines and regulations. This new rule aims to protect taxpayers from having to bail out large banks, as they did during the 2008 financial crisis when the government used Â£65 billion to prop up some of the largest banks. New regulations also aim to ensure day-to-day banking operations are strictly separated from potentially risky investment divisions.
If the Bank of England finds an institution violating these rules, it can make the final decision to enforce policies that it deems will protect both the bank and taxpayers. Some of the main concern of banking officials is the future of British banks and what future regulations could hinder business growth and lending capabilities. Osborne also looks to give the Bank of England increased oversight capabilities and regulatory powers.Â
More importantly for business owners, the reforms will also allow bank customers to switch to another financial institution of their choice with a week, according to BBC News, making it easier for small businesses to access new accounts and banking systems without delay.
"Our country has paid a higher price than any other major economy for what went so badly wrong in our banking system," said Osborne. "The anger people feel is very real. Let's turn that anger from a force of destruction into a force for change."
The legislation has gone to Parliament, and it is anticipated it will be passed within a year.
Concerns for business owners
While some entrepreneurs may assume new international banking rules don't play a significant role in their operations, this attitude could be detrimental to their company processes. Business owners who don't take note of changing regulations and banking processes may find themselves in trouble when working with a large institution that fails to comply with new legislation.
For this reason, expanding companies should look to work with banks experienced in overseas rules and regulations and that can comply with both local requirements, cater specifically to small enterprise needs and help ensure a growing firm is able to access business financing.
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