Re-fencing: the pitfalls, and opportunities, of M&A for ring-fenced banks

The UK’s bank ring-fencing regime puts barriers in the way of mergers and acquisitions by ring-fenced bodies. The government has recently evidenced its intention to relax these, both as part of its review of the regime generally and, during times of crisis, for specific acquisitions. This article outlines the concessions already provided for in the ring-fencing regime and highlights the remaining challenges, particularly for acquirers which are already subject to the ring-fencing regime. (This article does not seek to examine the policy arguments for and against the ring-fencing regime, which have been examined as part of the Ring-fencing and Proprietary Trading Panel Report (referred to as the Skeoch Report) and which are subject to further consideration under a government consultation which is open for response at the time of writing.)