The Deputy Governor addresses the issues raised by inequalities of supervisory treatment and their impact on competition, and in particular the possible effects on UK-incorporated banks of the measures recently taken, or proposed, by the Bank on off balance sheet business and large exposures. He emphasises that, while the Bank will try to avoid placing locally-incorporated banks at a competitive disadvantage, this will not be done by imposing a laxer regime than prudence dictates. The Bank will seek to ensure that branches of foreign banks in London do not engage in imprudent risk-taking, will continue to press for international agreement on broadly common standards and will encourage other countries to follow its lead in seeking to bring the full range of banks' activities within their supervisory framework. But absence of comprehensive agreement will not diminish the Bank's determination to ensure that UK banks remain adequately capitalised and conduct their business prudently.
Supervision and competitive conditions - Speech by the Deputy Governor