Ease cap­i­tal rules to boost in­fra­struc­ture

The Daily Telegraph - Business - - Front Page - Michael O’Dwyer By

CITY bosses have urged the Chan­cel­lor to slash cap­i­tal re­quire­ments and cut red tape af­ter the Brexit tran­si­tion to de­liver a multi­bil­lion-pound boost to the post-Covid eco­nomic re­cov­ery.

Life in­sur­ers and pen­sions com­pa­nies are cam­paign­ing for a cut in the level of cap­i­tal they have to hold on their bal­ance sheets, which would re­lease cash for a spend­ing splurge on in­fra­struc­ture.

They also want to slash fi­nan­cial re­port­ing re­quire­ments and red tape which they be­lieve are ex­ces­sive.

Traders wel­comed the Gov­ern­ment’s de­ci­sion to aban­don the im­ple­men­ta­tion of new Euro­pean rules on se­cu­ri­ties trad­ing, which would have im­posed fines for fail­ing to set­tle trades within Brus­sels’s dead­lines.

Xavier Ro­let, former boss of the Lon­don Stock Ex­change and now chair­man of the cap­i­tal mar­kets arm of stock­bro­ker Shore Cap­i­tal, said the move “will greatly ben­e­fit the eq­uity fund­ing ecosys­tem for SMEs”.

Matthew McLough­lin, head of trad­ing at Lion­trust As­set Man­age­ment, said the cen­tral se­cu­ri­ties de­pos­i­tory rules, which come into ef­fect in Europe in Fe­bru­ary, would have hurt liq­uid­ity in shares of smaller com­pa­nies.

The Trea­sury is car­ry­ing out a sweep­ing re­view to stream­line and tai­lor fi­nan­cial ser­vices reg­u­la­tions once the Brexit tran­si­tion ex­pires in De­cem­ber. John Glen, the City min­is­ter, sig­nalled changes to reg­u­la­tions last week but said any new rules would main­tain or en­hance the strict stan­dards that had helped the UK be­come a global fi­nan­cial hub.

Tracy Blackwell, chief ex­ec­u­tive of Pen­sion In­surance Cor­po­ra­tion, said cut­ting the amount of as­sets in­sur­ers had to hold would boost spend­ing on in­fra­struc­ture such as so­cial hous­ing.

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