UPDATE 1-Bank of England starts post-Brexit push to simplify bank rules

(Adds more detail)

LONDON, April 29 (Reuters) - Simpler rules for smaller banks
won't mean a compromise on safety, the Bank of England said on
Thursday as it launched a post-Brexit landmark rethink of
regulation.

Britain's departure from the European Union means it can
diverge from the bloc's one-size-fits-all rules. The aim is to
help smaller lenders and building societies grow to create
greater competition for the handful of banks that have long
dominated high streets.

"What we aim at is a simpler regime which delivers the same
level of resilience for small firms in a more efficient way,"
Victoria Saporta, the BoE's executive director for prudential
policy, said in a speech.

The BoE published a discussion paper that set out its
thinking on how to simplify rules for smaller lenders before
putting forward more fleshed out proposals later on that would
specify what sized banks would be in scope.

The paper asks whether the BoE should chip away at existing
capital and liquidity rules or simply start with a blank sheet
of paper.

"The criteria would be designed to identify those firms that
are not internationally active and for which prudential
regulation could be simplified without reducing their
resilience," the paper said.
(Reporting by Huw Jones; Editing by Hugh Lawson)