Ease capital rules to boost infrastructure
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.