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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 further."
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."