Recent market events: Implications for the UK banking sector

On 8 March 2023, a bank and its primary regulator, the California Department of Financial Protection and Innovation (DFPI), publicly announced the bank’s voluntary liquidation. Two days later, the DFPI publicly announced it had closed the bank, citing inadequate liquidity and insolvency, and appointed the Federal Deposit Insurance Corporation as receiver. Against this backdrop, the market, customers and regulators will again refocus on the resilience of the banking sector, and banks will need to respond.

In this document, we set out initial views on the likely key regulatory responses and the steps that banks’ Boards should be considering to manage their resilience in the current challenging market conditions.

Download this paper for an analysis of how recent events may increase regulatory focus, across a broad range of areas, including governance, risk management, stress testing capabilities and recovery and resolution.