LONDON: Theresa May is giving British banks the silent treatment. The UK’s new prime minister has avoided public references to the financial sector since taking over from David Cameron on July 13. This may not be a reason for lenders to fret.

In the eight years since the financial crisis, UK banks have grown accustomed to being bashed. That may yet be May’s intention. The big fear is that a gap in taxes from a post-Brexit economic slump could be plugged by a tax raid. If May sought to up the UK banking sector’s 22.9 billion pounds in income and corporate taxes in 2014-15 — 4 per cent of overall receipts — few taxpayers would leap to its defence.

But the silence could equally not be a sign of hostility. Relative to the other issues on her plate, UK banks should be way down the pile. The Bank of England views lenders’ aggregate common equity Tier 1 (CET1) capital as in line with the 13.5pc of risk-weighted assets it deems sufficient. The big four lenders may not be too badly affected by the loss of the EU single market — Royal Bank of Scotland and Lloyds Banking Group are now mostly UK-focused, Barclays has pulled back from the continent and HSBC’s European operations are subsidiarised, making it less reliant on the EU “passport”.

In fact, given the importance of maintaining lending to business, May could help rather than hinder. The Bank of England has already slightly relaxed capital requirements and will do all it can not to cut rates too much, which would hit lending margins, or raise them, which could mean big credit losses.

Published in Dawn, July 29th, 2016