The Bank of England has told the City there will be no bonfire of regulations after Britain leaves the EU.
Sam Woods, head of the Bank’s regulatory watchdog, warned insurance chiefs last week that future rules governing the sector would stick close to EU standards.
At a breakfast meeting on Wednesday, bosses pushed Woods, chief executive of the Prudential Regulation Authority, on which parts of the Europe-wide Solvency II regime might be ditched or watered down after Brexit. It is understood he told them not to expect big changes.
The Bank’s message is thought to be part of a government strategy to ensure the UK financial sector retains access to EU markets under so-called regulatory equivalence.
Big investment banks, mainly concerned about the potential loss of access to EU markets, have been less keen to lobby for a break with Brussels rules.
Some insurers were hoping to benefit from a bonfire of EU red tape however. Solvency II has been a sore point for some leading insurers, such as Legal & General and Prudential.
The rules, which came into force in January last year, make it costly to invest policyholders’ cash in infrastructure assets. Instead, they encourage insurers to hold much of the money in safe but low-return government bonds.
Some analysts have argued that L&G’s recent investment strategy — in which it has ploughed money into housing, schools and hospitals — is a bet on a shift in regulation after Brexit.
Woods’s warning comes as business steps up its push for a “softer” Brexit. The CBI last week called for the country to remain in the single market and customs union until a new trade deal with Brussels is agreed. [...]
Full article on The Sunday Times
© The Sunday Times
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article