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Lloyds chief urges UK policymakers to keep their hands off banks’ profits

Lloyds chief urges UK policymakers to keep their hands off banks’ profits

Lloyds chief urges UK policymakers to keep their hands off banks’ profits
Nov 28, 2023 1 min, 3 secs

His comments appear to be a call for assurances that the UK will not follow some European governments, which have put new taxes on banks accused of reaping billions in extra profit from rising interest rates over the past year.

Nunn urged policymakers to keep their hands off profits, dividend payments to shareholders and the amount of interest paid to lenders that park cash at the Bank of England.

“With respect to financial services, the nervousness is the narrative around what we saw in Spain and Italy and Switzerland around windfall taxes, or reserve remuneration, or withholding dividends,” he told the FT’s global banking summit in London on Tuesday.

It followed similar policies introduced in the Czech Republic, Lithuania and Spain, which have taken aim at banks profits that have soared in line with rising interest rates.

Swiss policymakers took decisive action on the issue last month, announcing they would no longer make payouts to commercial lenders on the minimum sums they are meant to hold in reserves at the central bank in an effort to cut costs.

Nunn said policymakers needed to boost UK’s international credibility and attract investors who might otherwise be wary of betting on Britain, particularly in the wake of Liz Truss’s disastrous mini-budget last year.

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