London Daily

Focus on the big picture.
Friday, Jul 17, 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
French National Assembly Overrides Senate to Pass Historic Assisted-Dying Legislation
Spanish Prime Minister's Wife Ordered to Stand Trial as Corruption Probes Encircle Governing Party
Zelensky Faces Kyiv Protests Over Ousting of Dynamic Ukrainian Defense Minister
Colombia Influencer Dies After Cosmetic Procedure at Unlicensed Bogota Salon
Thomas Tuchel Faces Fierce Backlash After Tactical Retreat Costs England World Cup Final Berth
A Quiet Bastille Day: France Grapples with World Cup Heartbreak and Leftover Fireworks
Canadian Wildfire Crisis Triggers Transnational Air Quality Alerts Ahead of Soccer Finale
UK Housing Reform Debate Intensifies Over Tenant Protection Measures
UK Defence Official Challenges Russian Narrative on NATO Readiness and European Security
UK Names Independent Member to Judicial Pension Board to Strengthen Oversight
UK Parliamentary Committee Sets New Framework for Select Committee Leadership Roles
UK Government Pushes Energy Savings Through School Solar Expansion Plan
UK Committee Reviews Future of Gaelic Broadcasting and Language Support
UK Government Expands Industrial Skills Support in Wales as Steel Sector Faces Change
UK Rejects Russian Claims That European Defence Spending Is Aggressive
UK Schools and Gaelic Broadcasting Among Areas Reviewed in New Parliamentary Inquiries
UK Housing Committee Calls for Stronger Tenant Protections Under Rental Reform Plans
UK Government Faces Pressure for Stronger Oversight After South East Water Failings Report
UK Parliament Opens Inquiry Into Safety of Women and Girls on Public Transport
UK Defence Ministry Appoints Interim Chief Defence Medical Officer During Transition Period
UK Government Announces Five Million Pound Skills Programme for Young People in Port Talbot
UK Government Launches Solar Programme to Cut Energy Costs for Schools
Met Office Warns Extreme Weather Is Becoming More Common Across the UK
UK Government Faces Internal Debate Over New Chancellor Appointment Under Andy Burnham
Andy Burnham Set to Become UK Prime Minister After Keir Starmer’s Resignation
UK Economy Grows Slightly in May as Supply Chain Disruptions Continue to Weigh on Industry
British Steel Moves Into UK Public Ownership to Protect Domestic Steel Production and Jobs
Spain in Ecstasy: "We Feel Unbeatable, We Taught the Whole World a Lesson"
Spain and UK Dismantle Gibraltar Border Following Landmark Schengen Integration Treaty
Church of England Rejects Plan to Rewild Thirty Percent of Land by 2030
UK Parliament Examines Future of Gaelic Broadcasting in Scotland
Thames Water Faces Criticism Over Four Million Pounds in Bonus Payments
South East Water Crisis Puts UK Water Regulation Under Renewed Scrutiny
UK Report Highlights Racial Inequality in Homelessness Support Services
UK Government Defends Proposed Social Media Curfew for Teenagers Despite Criticism
Reform UK Gains Recognition as Major Political Party in New Polling
Labour Party Faces Internal Divisions Over Gaza Policy and Asylum Reform
Experts Warn UK Housing and Transport Infrastructure Is Unprepared for Rising Extreme Heat
UK Human Rights Committee Begins Review of Immigration and Asylum Bill
UK Parliament Launches Inquiry Into Declining High Streets Across England
Bank of England Governor Warns of Growing AI Risks to Global Financial Security
UK Public Finance Institutions Mobilize Fifty Billion Pounds to Support Growth and Jobs
UK Parliament Opens Inquiry Into Long-Term Strategy Toward Russia
UK-India Trade Agreement Takes Effect With Zero-Duty Access for Nearly All Indian Exports
Forget Tinder: The Surprising Platform Where People Find Love
UK Government Faces Growing Debate Over Local Control of Immigration Enforcement
UK Biodiversity Forum Highlights Business Need to Protect Natural Environment
UK Parliament to Consider Workplace Temperature Limits Amid Climate Concerns
UK Parliament Considers Independent Immigration Appeals Authority Proposal
BBC Charter Renewal Scrutiny Intensifies as Parliament Reviews Broadcaster’s Future
×