City Minister Andrew Griffiths has promised that the ‘Edinburgh’ package of post-Brexit reforms for the financial services industry will make the sector “as internationally competitive as possible”.
On Friday, Prime Minister Jeremy Hunt will launch extensive consultations on financial services rules to scrap EU standards and boost the city’s competitiveness against global rivals.
Initially dubbed the Big Bang 2.0 by ministers, the reforms will see the relaxation of insurance rules under the Solvency II regime, the liberation of some retail banks from lock-in, and the Mifid response to EU-imposed analyst scrutiny. 2 restrictions. Investor.
In an interview with the Financial Times before the announcement, Griffiths said the proposed changes would allow the UK to “hold or capitalize on new opportunities, new innovations and new ways to make markets more fluid and effective”. said it can.
He promised the reforms would be “the first on the block to take advantage of Brexit freedoms”. Other sectors such as life sciences will follow.
Griffiths highlighted some of the 30-point reform plan proposals. They include the “ditching” of packaged retail investment and insurance products (PRIIPS), consulting on new central bank digital currencies using blockchain technology, and trading in London to compete with faster US rivals. This includes exploring ways to accelerate the settlement of
Mr Griffiths said the government will begin consultations on the 2016 senior management structure, which he said was a “some kind of change” to ensure that those in positions of power are responsible and competent. He added that this does not mean abandoning the idea of having a “qualified personnel system.”
Other areas include a new green finance strategy and plans to give the Financial Conduct Authority powers to oversee environmental, social and governance ratings.
A new UK long-term asset fund will also be launched, an open-ended structure that allows investment in illiquid assets.
Griffiths said much of the work will be done in 2023, setting a much faster timetable than the EU, which typically takes years to agree and implement rule changes.
Mr Griffiths said the UK was “blessed with quality regulators” but said that “it was right to have a framework in place to ensure that the framework pursues growth and is internationally competitive”. If you’re saying you want to have a financial market, you’re absolutely right.”
He added: they make them every day.
The UK’s post-Brexit approach to rulemaking gives regulators more direct authority than under the EU regime, where very detailed regulations are agreed at the political level.
Regulators have pledged to become more “agile” in responding to industry needs and evolving market dynamics. Treasurers and lobbyists say such changes could have a bigger impact than individual rule tweaks.
On bank ring-fencing, Griffiths said the government would implement an earlier review of the “never abandon ring-fencing” system. [but] how do you see the long term [it] Along with the resolution regime. . . we’re talking about getting rid of some of the retail-only banks, for example. ”
Ringfencing was designed to protect banks’ retail divisions from losses in high-risk trading businesses. However, existing regulations also apply to banks such as Santander, TSB and Virgin Money, which are predominantly engaged in retail banking.
City officials have long urged governments to avoid the “bureaucratic bonfire” once touted as a benefit of Brexit. International financial institutions flock to London for the high standards of governance demanded by their regulators.
Griffiths stressed the need to maintain high regulatory standards.
“We always compete on the basis of the highest quality regulations in line with international standards.”
