London Daily

Focus on the big picture.
Friday, Jan 30, 2026

Banks 'may need more liquidity buffers' to cope with runs in future, BoE governor Andrew Bailey warns

Banks 'may need more liquidity buffers' to cope with runs in future, BoE governor Andrew Bailey warns

The Governor of the Bank of England said online technology risked speeding-up crises - but reaffirmed his conviction that there are no systemic problems.
Andrew Bailey has called into question whether UK banks have large enough cash buffers to cope with crises similar to the recent run on Silicon Valley Bank.

The Governor of the Bank of England (BoE) said last month's turmoil, which led to the rapid takeovers of the bank's US and UK arms, served as a warning that rushes to withdraw deposits can now go "further much more quickly" thanks to online technology.

The collapse of the bank sparked jitters across the globe, with UBS stepping in to save its Swiss rival Credit Suisse, while bank shares also slid, before markets later calmed.

Speaking at an event in Washington DC, Mr Bailey cautioned: "We can't assume that, going forwards, the current answer on the total size of liquidity protection is the correct one.

"We saw with Silicon Valley Bank that with the technology we have today - both in terms of communication and speed of access to bank account - runs can go further much more quickly.

"This must beg the question of what are appropriate and desired liquidity buffers that create the time needed to take action to solve the problem."

But he also reaffirmed his conviction that reforms introduced after the 2008 financial crisis had "worked", adding: "I do not believe we face a systemic banking crisis."

"When I look at the UK banks, they are well capitalised, liquid and able to serve their customers and support the economy," he added.

Mr Bailey acknowledged that requiring banks to hold larger buffers risked having an impact on economic growth.

He told his audience at the Institute of International Finance: "A common outcome of... increasing the broader liquidity buffers of banks and non-banks could be to create a constraint on lending and investment in the real economy.

"For the UK economy this would go against the need to finance investment to support stronger potential growth, from its current weak level."

And the governor said banks and non-banking financial institutions could not be expected to hold ever larger liquidity buffers to cover unforeseeable 'Black Swan' events, and said it was preferable for central banks to have tools to act with "temporary and targeted interventions".

Lessons to be learnt

Mr Bailey's comments on online technology come after his deputy Sam Woods told MPs on the Treasury Committee last month that banks needed to consider how easily deposits can be withdrawn electronically in seconds.

The governor later told a separate event, hosted by the International Monetary Fund, that he believed lessons could still be learnt from the recent turmoil - despite his insistence that there were no systemic issues - such as how to adapt to the speed and ease with which deposits could now be withdrawn.

"There are learning points from these issues that we have run into," he told an audience in Washington DC. "We will have to spend a lot of time thinking these things through."

Mr Bailey also reiterated he did not see the makings of another 2008 financial crisis as "the system is in a much more robust condition". And he added: "we've got a lot more tools in the armoury [now]".
Newsletter

Related Articles

0:00
0:00
Close
AstraZeneca Announces £11bn China Investment After Scaling Back UK Expansion Plans
Starmer and Xi Forge Warming UK-China Ties in Beijing Amid Strategic Reset
Tech Market Shifts and AI Investment Surge Drive Global Innovation and Layoffs
Markets Jolt as AI Spending, US Policy Shifts, and Global Security Moves Drive New Volatility
U.S. Signals Potential Decertification of Canadian Aircraft as Bilateral Tensions Escalate
Former South Korean First Lady Kim Keon Hee Sentenced to 20 Months for Bribery
Tesla Ends Model S and X Production and Sends $2 Billion to xAI as 2025 Revenue Declines
China Executes 11 Members of the Ming Clan in Cross-Border Scam Case Linked to Myanmar’s Lawkai
Trump Administration Officials Held Talks With Group Advocating Alberta’s Independence
Starmer Signals UK Push for a More ‘Sophisticated’ Relationship With China in Talks With Xi
Shopping Chatbots Move From Advice to Checkout as Walmart Pushes Faster Than Amazon
Starmer Seeks Economic Gains From China Visit While Navigating US Diplomatic Sensitivities
Starmer Says China Visit Will Deliver Economic Benefits as He Prepares to Meet Xi Jinping
UK Prime Minister Starmer Arrives in China to Bolster Trade and Warn Firms of Strategic Opportunities
The AI Hiring Doom Loop — Algorithmic Recruiting Filters Out Top Talent and Rewards Average or Fake Candidates
Amazon to Cut 16,000 Corporate Jobs After Earlier 14,000 Reduction, Citing Streamlining and AI Investment
Federal Reserve Holds Interest Rate at 3.75% as Powell Faces DOJ Criminal Investigation During 2026 Decision
Putin’s Four-Year Ukraine Invasion Cost: Russia’s Mass Casualty Attrition and the Donbas Security-Guarantee Tradeoff
Wall Street Bets on Strong US Growth and Currency Moves as Dollar Slips After Trump Comments
UK Prime Minister Traveled to China Using Temporary Phones and Laptops to Limit Espionage Risks
Google’s $68 Million Voice Assistant Settlement Exposes Incentives That Reward Over-Collection
Kim Kardashian Admits Faking Paparazzi Visit to Britney Spears for Fame in Early 2000s
UPS to Cut 30,000 More Jobs by 2026 Amid Shift to High-Margin Deliveries
France Plans to Replace Teams and Zoom Across Government With Homegrown Visio by 2027
Trump Removes Minneapolis Deportation Operation Commander After Fatal Shooting of Protester
Iran’s Elite Wealth Abroad and Sanctions Leakage: How Offshore Luxury Sustains Regime Resilience
U.S. Central Command Announces Regional Air Exercise as Iran Unveils Drone Carrier Footage
Four Arrested in Andhra Pradesh Over Alleged HIV-Contaminated Injection Attack on Doctor
Hot Drinks, Hidden Particles: How Disposable Cups Quietly Increase Microplastic Exposure
UK Banks Pledge £11 Billion Lending Package to Help Firms Expand Overseas
Suella Braverman Defects to Reform UK, Accusing Conservatives of Betrayal on Core Policies
Melania Trump Documentary Sees Limited Box Office Traction in UK Cinemas
Meta and EssilorLuxottica Ray-Ban Smart Glasses and the Non-Consensual Public Recording Economy
WhatsApp Develops New Meta AI Features to Enhance User Control
Germany Considers Gold Reserves Amidst Rising Tensions with the U.S.
Michael Schumacher Shows Significant Improvement in Health Status
Greenland’s NATO Stress Test: Coercion, Credibility, and the New Arctic Bargaining Game
Diego Garcia and the Chagos Dispute: When Decolonization Collides With Alliance Power
Trump Claims “Total” U.S. Access to Greenland as NATO Weighs Arctic Basing Rights and Deterrence
Air France and KLM Suspend Multiple Middle East Routes as Regional Tensions Disrupt Aviation
U.S. winter storm triggers 13,000-plus flight cancellations and 160,000 power outages
Poland delays euro adoption as Domański cites $1tn economy and zloty advantage
White House: Trump warns Canada of 100% tariff if Carney finalizes China trade deal
PLA opens CMC probe of Zhang Youxia, Liu Zhenli over Xi authority and discipline violations
ICE and DHS immigration raids in Minneapolis: the use-of-force accountability crisis in mass deportation enforcement
UK’s Starmer and Trump Agree on Urgent Need to Bolster Arctic Security
Starmer Breaks Diplomatic Restraint With Firm Rebuke of Trump, Seizing Chance to Advocate for Europe
UK Finance Minister Reeves to Join Starmer on China Visit to Bolster Trade and Economic Ties
Prince Harry Says Sacrifices of NATO Forces in Afghanistan Deserve ‘Respect’ After Trump Remarks
Barron Trump Emerges as Key Remote Witness in UK Assault and Rape Trial
×