Bank of England starts post-Brexit push to simplify bank rules

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FILE PHOTO: A view of The Bank of England and the City of London financial district in London, Britain

LONDON (Reuters) -Simpler rules for smaller banks won't mean a compromise on safety, the Bank of England said on Thursday as it launched a post-Brexit landmark rethink of regulation.

Britain's departure from the European Union means it can diverge from the bloc's one-size-fits-all rules. The aim is to help smaller lenders and building societies grow to create greater competition for the handful of banks that have long dominated high streets.

"What we aim at is a simpler regime which delivers the same level of resilience for small firms in a more efficient way," Victoria Saporta, the BoE's executive director for prudential policy, said in a speech.

The BoE published a discussion paper that set out its thinking on how to simplify rules for smaller lenders before putting forward more fleshed out proposals later on that would specify what sized banks would be in scope.

The paper asks whether the BoE should chip away at existing capital and liquidity rules or simply start with a blank sheet of paper.

"The criteria would be designed to identify those firms that are not internationally active and for which prudential regulation could be simplified without reducing their resilience," the paper said.

(Reporting by Huw Jones; Editing by Hugh Lawson)