UK banks and insurers want rules to remain
Britain’s banks and insurers did not want their rule books dismantled after Brexit, and the ability to ease regulation will depend on the country’s future trade deal with Europe, Financial Conduct Authority chairman Charles Randell said.
Britain will leave the EU in March 2019 and although a “standstill” transition deal has been agreed with Brussels lasting to the end of 2020, it is unclear what sort of trading links Britain will have with Europe after then.
Some UK parliamentarians see Brexit as an opportunity to row back on EU rules, but Randell saw no appetite for this among firms themselves.
“I don’t think any of the financial services firms I meet want to try to win business through a regulatory race to the bottom,” Randell said.
Financial firms believed that the “quality kite mark” they get from being regulated in Britain is an important selling point for their global business.
While Britain is leaving the EU, it is not leaving a system of global standards, Randell said.
“It will be my intention to make sure that we redouble our efforts to engage with global standard setters because I think that will be necessary in a world after we’ve left the EU. High standards of regulation will continue,” he said.
Regulators have approved a welter of new rules since banks had to be rescued by taxpayers in the 2007-09 financial crisis.
There is a consensus among the industry and consumer groups that the volume of regulatory change is unsustainable, Randell said.
There is room to review existing rules for “unintended consequences”, he said.
“If we do see a slower pace of regulatory change, there may be scope to spend a bit more time examining the consequences regulation have had … and whether all the regulation has served the purpose it was originally intended to serve.”
Britain’s withdrawal agreement with the EU may give scope for this review to take place, he said.