According to media reports, the Bank of England is considering plans to require more international banks to set up subsidiaries in the UK rather than sub-branches.。

The move could lower the threshold for foreign banks doing corporate business in the country to set up subsidiaries with their own capital and liquidity.。The Bank of England is considering the plan as part of its review of the US Silicon Valley bank collapse earlier this year, according to people familiar with the matter.。In recent weeks, City of London Minister Andrew Griffith has also been involved in discussions to ask more banks to set up subsidiaries, he added.。

Setting up subsidiaries (such as the London subsidiary of Silicon Valley Bank) allows local regulators to control banks that are on the verge of bankruptcy, rather than leaving their parent company's regulators to decide their fate on their own。

But requiring more banks to set up subsidiaries may not be popular with the industry, as established subsidiaries are more expensive than just maintaining branches locally.。Giles French, chief executive of the Association of Foreign Banks, said: "The ability to leverage bank branch structures is an important part of making London a successful and connected international financial centre.。The association represents nearly 200 foreign banks doing business in the UK.。He added that any changes to the threshold would need to be "carefully assessed so as not to affect international banks doing business in the UK and providing the necessary liquidity and capital."。

Sam Woods, head of the Bank of England's regulator, had said in March that the UK had more than 150 bank branches with assets of about 6.3 trillion pounds。According to the Bank of England report, as of June, the establishment of branches in the UK include ABN Amro, Korea Development Bank and CaixaBank.。

Currently, banks with a retail and "small business transaction deposit" size of £100m should set up local subsidiaries under the Bank of England's regulatory requirements.。A bank may need to set up a subsidiary if it has more than 5,000 retail and small business customers。However, these are not "hard" thresholds and "may vary from company to company."。

This year's Silicon Valley bank failures have prompted the Bank of England to reassess these thresholds because, some argue, they highlight the benefits of subsidiaries.。

Silicon Valley Bank's London-based business became a subsidiary six months before its Silicon Valley Bank collapse, which allowed the Bank of England to take over the bank's operations in the UK when they were in trouble.。At the time, Silicon Valley Bank's UK subsidiary had close to £9 billion in deposits, mostly from corporate customers who prompted the government to provide a rescue operation for the bank.。Following the Silicon Valley incident, HSBC Group bought the UK subsidiary of Silicon Valley Bank for £1, brokered by the Bank of England。The move ensures that deposits by UK tech companies and others who rely on the bank are fully protected。

While the government is keen to intervene if necessary to help UK corporate customers of failing banks, this could add more burden to lenders。In addition, the above plan may conflict with the government's efforts to improve the competitiveness of UK financial services and other tasks of the Bank of England to consider competitiveness in its decision-making.。

"There can be no one-size-fits-all approach," said one person familiar with the Treasury's initial stance.。Once a subsidiary, there are varying degrees of transparency and implied liability。"

A person familiar with the matter said that if the Bank of England decides to pursue the plan, it may first do industry consultation and report progress to the UK Treasury。

In addition to the discussion of "branches" and "subsidiaries," the collapse of Silicon Valley banks has prompted the Bank of England to re-examine the UK's deposit insurance guarantee scheme and the system for dealing with bank failures.。