The industry, campaigners and MPs were disappointed by proposals to overhaul the way financial rules are made.
The U.K. government handed the finance industry a major prize last week as it released proposals to overhaul British regulators' powers post-Brexit, reflecting the efforts of nearly two years of heavy City lobbying.
The industry's response: Hang on, there's more.
The Treasury presented the 80-page framework for financial regulation
as a key Brexit win, allowing the U.K. to be more flexible in meeting
ever-changing market conditions. Giving regulators more power and
preserving their independence is a critical fix that will support a more
dynamic supervisory structure than under EU rules, according to the
government and its backers in the City.
But now industry sees even more scope for concessions. For example,
it wants a new mandate that regulators take international
competitiveness and economic growth as primary considerations, on par
with policing integrity and capital requirements in the sector.
That would effectively give even broader leeway to the City, as its
lawyers could argue any new rule could compromise the country's
international competitiveness and growth potential.
It's "disappointing" the consultation ranked competitiveness only as
"a secondary objective," said Huw Evans, the director-general of the
Association of British Insurers. "This does not go far enough, as
regulators will always put primary objectives above secondary ones."
"Unless regulators have economic growth as a primary objective, we
are not convinced anything major will change," he added. "[The document]
has the right intentions ... but it could have gone further."
Miles Celic, the chief of TheCityUK, another industry group, conceded
the proposals "mirror much of what the industry has been calling for."
But he also believes the government should take the overhaul "even
A Treasury official countered that the government was right to keep
competitiveness as a secondary objective on grounds of financial
stability. “It allows regulators to focus on their usual
responsibilities," he said. "We can’t have [competitiveness objectives]
inhibit prudential regulations."
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