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A senior Barclays executive and former Treasury official has been named as the chief supervisor for British banks and insurers, underscoring ministers’ drive to ease the regulatory burden imposed after the 2008 financial crisis.

Katharine Braddick, head of strategic policy at Barclays, will replace Sam Woods as chief executive of the Bank of England’s Prudential Regulation Authority when his term expires at the end of June, the Treasury said on Friday.

The appointment of an executive at one of the UK’s biggest banks as the sector’s chief supervisor is likely to be welcomed in many parts of the City of London as a sign that chancellor Rachel Reeves is serious about reforming regulation to support economic growth.

But it could also raise concerns over conflicts of interest and the risk that Braddick ushers in a wave of deregulation that leaves the country more exposed to another next financial crisis.

Reeves said in a statement that Braddick was “an accomplished pro-business leader with the experience to keep our financial system safe while backing the investment and lending that drives growth”.

“She understands the City and regulation,” Reeves added.

After two five-year terms as PRA chief, Woods has been influential in shaping much of the post-crisis regulatory framework for British banks and insurers.

Braddick, who will also serve as one of the BoE’s four deputy governors, will inherit several key decisions, including whether to ease capital requirements for lenders.

Her appointment continues a trend of the government turning to people with private-sector experience to run regulatory bodies. Doug Gurr, former head of Amazon UK, was this week chosen to chair the Competition and Markets Authority after being hired on an interim basis last year.

Andrew Bailey, BoE governor, thanked Woods for his “many years of hard work” at the PRA and said he was confident Braddick would “lead the PRA with great ambition and skill, maintaining strong regulatory foundations to underpin a growing financial sector and a thriving economy”.

Braddick joined Barclays four years ago after two decades in the public sector, including senior roles at the Treasury, where she oversaw financial policy after Brexit. Before that, she was a director at the PRA.

She also worked at the Financial Services Authority for about a decade, including as head of banking policy in the wake of the 2008 crisis, after which the watchdog was broken up.

David Postings, chief executive of the UK Finance trade body, said Braddick’s appointment came “at a pivotal moment for the UK’s regulatory landscape” and that she was “an outstanding choice for this vital position”.

Some bank executives heavily lobbied the Treasury not to appoint Michael Hsu, a former senior US financial regulator, as Woods’ successor at the PRA.

The former head of the US Office of the Comptroller of the Currency was opposed by some in the sector after he warned that looser restrictions on banks could lead to another financial meltdown.

Banks are enjoying a long-awaited rehabilitation in the minds of regulators following the 2008 financial meltdown, with the US leading the charge on deregulation. 

UK bankers have also been quietly celebrating coming off “the naughty step”, as City minister Lucy Rigby put it last year, after avoiding an increase in bank tax in the Autumn Budget and talk of lighter regulation to spur growth. 

The PRA, which is part of the BoE, regulates the UK’s main banks and insurers. Since Brexit, it has been given extra powers to draw up regulations for the sector. 

Miles Celic, head of trade body TheCityUK, said Braddick was “clear-eyed about the industry’s role as a British national asset but has never shied away from constructively challenging the industry when she’s disagreed with it”.

Woods is closely associated with the introduction of many post-crisis restrictions on the financial sector, such as the rule requiring banks to ringfence their retail operations from their riskier investment banking businesses. 

This rule is under review by the government and many banks have been lobbying for its abolition. However, Barclays broke ranks last year and defended the benefits of ringfencing.