Britain should avoid major, hasty reforms to make its financial sector more globally competitive following the industry's separation from the European Union by Brexit, a parliamentary report said on Thursday.
The
finance ministry has proposed scores of changes to rules governing
capital markets, company listings and insurance to exploit independence
from EU regulation and create an opportunity for Britain to innovate.
Legislation is due this year.
The
outlook for the "resilient" financial sector "seems relatively
positive", given that far fewer finance jobs than expected had moved to
the EU, the House of Lords' European Affairs Committee said in its
report.
But committee chair Charles Hay said: "You should be a little bit wary because there's a lot still to play out in this."
Britain
is proposing to give regulators a secondary objective of aiding
financial sector competitiveness, but Hay said the committee was asking
the government to explain exactly how this would work in practice.
A separate parliamentary report last week declined to back the objective, saying it risked weakening standards. read more
Bankers
have called on the government to speed up reform, but Hay said it was
critical to get the right sequencing to reach the "new place" for a
sector that accounts for 10% of total British tax receipts.
"More
important than the speed is the final answer because if you rush and do
the wrong thing, then you will damage something very precious," Hay
said, outlining the report.
British
relations with the EU are strained, with UK clearing house access to
the bloc set to end in three years. A spat over Northern Ireland has put
on ice a new British-EU financial regulatory cooperation forum. read more
While
the government would be unwise to bet on "unlikely" future access to
the EU for British finance, it should weigh up the benefits of diverging
from rules it inherited from the bloc and thereby imposing new costs
for companies, the report said.
Reporting by Huw Jones; Editing by Bradley Perrett
Reuters
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