Britain must focus on the City of London’s global role when it comes to reforming financial rules after Brexit, senior finance officials said on Monday.
Britain is reviewing its financial rules for banks, insurers and markets after it fully left the European Union last December, largely severing the City’s access to the 27-nation bloc.
Katharine Braddick, head of financial services at Britain’s finance ministry, said reform will now focus on tailoring the rulebook better to circumstances in the UK.
“It’s not about lower standards, it’s about better targeted and really well informed standards,” Braddick told City & Financial’s City Week event.
Domestic-focused banks and insurers want simpler rules as a Brexit “dividend”, but their peers in cross-border markets want to stick with global norms to avoid additional compliance costs.
Douglas Flint, chair of Standard Life Aberdeen asset manager and former chair of HSBC bank, said a “change of language” was needed to stop talking about a UK financial system when it comes to post-Brexit reforms.
“You want a respected regulatory system that is deeply plugged into international rulemaking,” Flint said, adding that he wanted to see more political commitment to financial services.
“We have got to see ourselves as part of a global, international ecosystem rather than saying it’s the UK system.”
“The City is a host to a global financial community, not its own system,” agreed Barclays bank CEO Jes Staley, adding that providing finance for climate-related projects globally would keep London “relevant”.
David Schwimmer, CEO of the London Stock Exchange Group, said Britain must remain committed to keeping its markets open, collaborative and outward looking by knocking down barriers to cross-border activity.
“We do want a City that is at the vanguard of innovation,” Schwimmer said.
Allowing premium listings to have “dual class shares” to attract tech floats, and encouraging “dark trading” – off exchange dealings in shares – for big investors would keep London globally attractive, Schwimmer added.
Regulators having a dual responsibility for sector competitiveness and competition would also be “something to look forward to”, said Flint.