Treasury officials have stated their desire for guidelines based on worldwide best practices that strike a balance between company burdens and consumer safety.
The Chancellor of the United Kingdom, Jeremy Hunt, has initiated a significant overhaul of the country’s financial industry, to cut red tape and replace several EU laws.
Mr. Hunt stated that the measures, which were introduced in Edinburgh, will “turbocharge” growth despite the nation’s lagging economy and cost of living crisis.
He stated, “This country’s financial services sector is the engine that drives innovation, growth, and wealth throughout the nation.
Leaving the European Union presents us with a great opportunity to change our regulatory framework and unleash the full potential of our formidable financial services industry.
The chancellor detailed over thirty regulatory measures, including hundreds of pages of EU legislation to be reviewed, abolished, and replaced, ranging from transparency requirements for financial products to prudential regulations controlling banks.
“ring-fencing” – the law that compels giant banks to keep investment and retail banking separate – is one of the policies under scrutiny.
According to the Bank of England, this rule was implemented in 2019 to “improve the stability of the UK financial system and avoid taxpayers from bearing the consequences of failing banks.
The amendments, however, will exclude banks from the criteria if they do not engage in the significant investing activity.
In the past, banks have advocated for the rule to be eliminated or the deposit threshold that triggers it to be raised.
London is under pressure because Amsterdam has surpassed it as Europe’s leading share-trading center, and the EU is changing its own financial rules to decrease its remaining reliance on the city.
Phil Evans, director of the Bank of England, stated on Wednesday that the British economy benefits from being a global financial center, but that it also comes with responsibilities, such as resisting pressure to “reduce standards in the short term.”
