Chancellor Rachel Reeves set out the Leeds Reforms in her Mansion House speech on 15 July 2025, describing them as the most wide-ranging reform of financial services regulation in more than a decade. The speech launched the Financial Services Growth and Competitiveness Strategy, which HM Treasury published with a set of consultations and policy papers in its Mansion House 2025 collection.
Corporate INTL Newsroom · Banking & Finance
Leeds Reforms: Chancellor Sets Out an Overhaul of UK Financial Regulation
By The Corporate INTL Newsroom · 16 July 2025
The package is organised around four themes: rolling back regulation that has gone too far in seeking to eliminate risk, targeted changes in sectors where the UK is strong, changes to capital requirements, and measures to encourage retail investment.
Key measures
The Chancellor committed to meaningful reform of the bank ring-fencing regime while keeping the elements that support financial stability and protect deposits. Lower capital requirements for domestically focused banks under Basel 3.1 are to start in January 2027. The Financial Ombudsman Service will be reformed, including a proposed ten-year limit on claims, and its pre-decision interest rate will fall from 8% to base rate plus 1%. The burdens of the Senior Managers and Certification Regime are to be cut by 50%, with faster approvals.
For consumers, a retail investment campaign is due to launch in April 2026, and targeted support developed with the FCA is due before the new financial year. The Financial Policy Committee has changed its loan-to-income mortgage limit and will review the overall level of bank capital. Long-Term Asset Funds can be held in stocks and shares ISAs.
Sector priorities
The strategy identifies priority areas including insurance, with a new framework for captive insurance; asset management, with draft legislation expected in early 2026; fintech, with a scale-up unit run by the PRA and FCA; and digital assets, including work on tokenised securities, stablecoins and a digital gilt instrument. The government said it will not proceed with a UK green taxonomy and will instead work through the Transition Finance Council.
What it means for firms
The Leeds Reforms will be delivered through a mix of legislation, regulator rule changes and consultations, so banks, insurers, asset managers and fintech businesses will need to track each workstream separately. Firms affected by ring-fencing, the Senior Managers regime or Ombudsman complaints are likely to see detailed proposals first, while the capital changes run to a longer timetable.
Sources
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