Brexit Seen as Opportunity to Make Financial Rules More Competitive
Brexit has given the people of Britain a lot of short-term headaches. Most people are of the opinion that these short-term problems are a small price to pay for the long-term benefit of the country. A recent parliamentary report sees matters in the same way.
The APPG, All-Party Parliamentary Group, recently released a report on the financial sector of Britain. The report emphasizes that leaving the EU provides a remarkable and unique opportunity for Britain to make its financial markets more competitive. It is an opportunity for the country to define its financial rules in a way that helps it stay ahead of the rest of the world. Britain has enjoyed a unique position as the world’s financial hub but with Brexit and the confusion surrounding it, there are fears the city of London might lose its unique standing.
The British financial sector is a 130 billion pound market. That market has been severely hit with banks and investment managers moving to other cities in Europe as a result of Brexit. This move perturbed many in Britain who demanded some fightback in terms of regulations. However, the Bank of England has clearly stated that competitiveness isn’t one of its core objectives and that a regulatory fightback with the EU may not be in everyone’s interest.
British lawmakers believe that local regulators now have more power in regulating the UK market, as they do not necessarily have to conform to EU laws and policies. They will now be guided and overseen by local lawmakers. In other words, the country now has full control of its own markets and can design the general regulations in a way that helps it reclaim its central position in world finance.
With the exit from the European Union, Britain can now treat its wholesale and retail markets differently. This was not possible while being a part of the EU. Since the exit, tensions between the financial regulators of the two sides continue. Brussels is reluctant to give Britain much access to its markets without Britain clarifying its future intentions and objectives.