Timing is particularly apt as Financial Services and Markets Bill gets closer to coming into effect
Charlie Nunn (pictured top) doesn't often criticise his own regulators in public. But asked directly about risk-taking in UK business lending, the Lloyds chief executive didn't hold back.
"The UK has put in place regulations and constraints on lending to the real economy that I think is below where it needs to be for the long term," Nunn told the BBC’s Big Boss Interview podcast, having spent a decade running operations across 50 countries before returning to the UK. He singled out both the PRA and the FCA by name, saying each "have regulations that make it more difficult to lend to entrepreneurs, businesses, or more expensive for them than I think other countries have got."
It's a comment that lands at a genuinely live moment for the rulebook. The Financial Services and Markets Bill, introduced to the House of Lords on 19 May and now past its second reading, is the government's attempt to answer exactly this complaint – cutting the Senior Managers and Certification Regime's burden by half, reforming bank ring-fencing rules to widen what banks can lend against, and folding the Payment Systems Regulator into the FCA to reduce the number of bodies firms answer to. Both the PRA and FCA have also been operating under a secondary "competitiveness and growth" objective since 2023, a deliberate policy tilt toward easier lending that a House of Lords committee concluded last year still needed "clarity and culture change" to actually bite.
There's already evidence of the dial moving. The Bank of England's Financial Policy Committee relaxed the loan-to-income lending cap in 2025, letting individual lenders exceed the old 15% ceiling on high-income-multiple mortgages provided the market-wide limit holds, specifically to help first-time buyers priced out by rigid thresholds. In December 2025 the FPC went further, lowering the overall capital requirement banks must hold – a move welcomed by lenders but criticised by some economists, who argue the main beneficiaries will be bank shareholders through higher payouts rather than borrowers through cheaper or more available credit.
That's the tension sitting underneath Nunn's comments: regulators are visibly trying to loosen the framework, but the debate over whether that translates into more lending to actual businesses and mortgage borrowers, rather than just more headroom for banks, is far from settled. Nunn's own answer was blunt: Lloyds lends out 98p of every £1 held in customer deposits, which he says makes it unusual among UK institutions. Whether the new bill changes that ratio anywhere else in the market is the question worth watching once it clears the Lords.
