London’s City mulls post-Brexit future

WITH a crucial election, Brexit and potential trade deals looming, the future of the beating heart of Britain’s financial sector will be shaped in the coming months.

The spectre of a “Singapore-on-Thames” -- a highly deregulated British financial sector like the city-state -- is the dream of some pro-Brexit financiers, who have criticised European rules that they believe are holding them back.

But regulators don’t appear to be in a mood to tear up the rulebook just yet.

“It has been 10 years since the financial crisis and the subsequent reforms we put in place, and now is the right time to review our approach to regulation,” Nausicaa Delfas, from the UK Financial Services Authority (FCA), said this week.

“Brexit provides added impetus to look at things again.”

At a London conference on the issue, Barnabas Reynolds, who specialises in UK and EU regulation at law firm Shearman & Sterling, said the regulators should look at everything.

Like many in the City -- the financial hub in central London -- he did not see “what’s wrong” with the idea of a Singapore-on-Thames.

European financial rules, although designed under Britain’s influence, have restricted the sector’s ability to compete with Wall Street, he added. - Fintech boom -

The Governor of the Bank of England, Mark Carney, thinks differently.

He says there will be “no bonfire of financial regulation” and instead promises a “dynamic” approach to “optimise our efforts without compromising on the level of resilience”.

Most of the financial community is convinced that Britain, whose financial rules are currently aligned with those of the EU, has no interest in moving too far away from them at the risk of being denied access to the vital common market.

“We have been on a trajectory of improving the regulation rather than weakening it,” Iris Chiu, a law professor at University College London, told AFP.