The UK government is set to introduce new laws which will allow banks to take on more risk.

Andrew Griffith, the city minister, told an FT event that the new financial services bill currently being approved by parliament will update financial rule books and make regulators ‘nimbler’ while cutting insurance capital buffers.

The rule changes come at a time when London’s status as a financial capital of the world is waning as a result of Brexit, and increasing investment in New York and Singapore. The EU is set to introduce new laws next week which will force banks within the bloc to move some of their euro derivatives clearing from London to Frankfurt.

Speaking at the event, Griffith said: "The overall thrust of things is to allow more risk... You get reward from taking risks, you shouldn't be risk off, we just need to manage that in an appropriate way. We can make the UK a better place to be a bank, to release some of that trapped capital over time around the ring fence.”

The treasury has promised a wider set of rule changes which will boost competitiveness and reduce regulation, though Griffith said that he would be “pragmatic” before scrapping any EU rules.

Griffith also said that a significant part of his planning is based around making the UK a hub for cryptoassets and blockchain tech, though didn’t comment on the crypto market’s recent instability. He said: "We see big opportunities in fiat-backed stablecoins. That can be a really important mechanism for payments going forward.”

Elsewhere during the event, Lloyds boss Charlie Nunn welcomed the stability brought by new prime minister Rishi Sunak following the chaos that ensued after his predecessor’s disastrous mini budget.

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