Monday 14 July 2025 5:39 pm
The boss of banking juggernaut Natwest has issued a final plea to Rachel Reeves on the eve of her Mansion House speech, urging the Chancellor to fully unleash financial services’ growth potential.
Paul Thwaite, Natwest’s chief executive, said there was “no path to growth without [financial services]” as he called for Reeves to make key reforms to investment, financial education and regulation.
In a LinkedIn article, Thwaite said the Treasury’s inaugural Financial Services Growth & Competitiveness Strategy “needs to be ambitious, forward-looking and double down on the UK’s strengths”.
Reeves has leaned on the support of UK banks throughout her Chancellorship from calling bosses in for crisis tariff talks, discussions to improve lending to SMEs and a series of summits to strum up growth ideas.
The latter was a part of a wider string of meetings led by the Treasury with hopes of feeding growth solutions into the upcoming strategy.
“Ultimately, a strong economy needs strong banks, and a strong financial sector. And vice versa,” Thwaite said.
Bank chiefs call for deregulation
Thwaite and his banking peers have been quick to call for bolder regulatory improvements.
The bosses of HSBC, Lloyds, Natwest and Santander collectively wrote to Reeves earlier this year with demands to rip up the historic ring-fencing regime imposed on lenders.
A scrapping of the system, which requires major banks to separate their retail banking operations from their investment banking activities, could lead to Natwest saving £530m.
Thwaite said “further regulatory reform is crucial”. Whilst the banking chief acknowledged the importance of “high quality regulation,” he said it was the right time “to ensure our approach to regulation in the UK is effectively balancing stability and consumer protection as well as growth”.
“There is scope to remove both duplication and complexity and to ensure the UK remains competitive, including in its implementation of capital rules,” he said.
Changes to MREL are poised to be unveiled on Tuesday in a bid to boost the growth prospects of lenders.
The minimum requirement for own funds and eligible liabilities (MREL) rules dictate strict tailored requirements for banks possessing assets between £15-25bn to ensure firms can be safely resolved in a crisis without taxpayer bailouts.
The Bank of England launched a consultation in the final quarter of 2024, which proposed increasing the threshold to £20bn-30bn.
Thwaite said regulation changes “may sound technical and abstract, but they have a real impact on lending to businesses and how the UK is perceived as a place to do business and to invest. “
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