LONDON, Oct 14 (Reuters) - Britain will soon take steps to ease so-called ring-fencing rules on banks introduced after the 2007-09 financial crisis, in order to improve the competitiveness of the country's banking sector, city minister Tulip Siddiq said on Monday.
The move comes as Britain hosted an investment summit on Monday designed to boost the country's appeal to global investors.
The ring-fencing rules - which separate consumer lending operations from more volatile investment banking - were introduced after Britain's taxpayers had to bail out several failing lenders in the financial crisis.
Banks have long argued that the rules are too onerous and hamper Britain's competitiveness versus other global financial centres.
Siddiq said in a statement on Monday that the government would put in place a package of reforms that would also support economic growth, while maintaining financial stability.
The threshold for retail deposits required for the rules to kick in will be raised to 35 billion pounds ($46 billion), from 25 billion currently, Siddiq said.
The reforms are also set to include a secondary threshold to exempt retail-focused banks from the regime if investment banking accounts for less than 10% of their core capital, the statement added.
The changes will also include flexibility to allow ring-fenced banks to operate globally and steps to encourage more investment in small businesses.
The Bank of England, which regulates lenders, has previously said that the ring-fencing rules are working satisfactorily and were not in need of a major overhaul.
The BoE was not immediately available for comment.
The reforms will be implemented as soon as parliamentary time allows, Siddiq said.
($1 = 0.7666 pounds)
Reporting by Sachin Ravikumar and Iain Withers; Writing by Catarina Demony; Editing by Paul Sandle and Louise Heavens
