THINK TANK economists said yesterday fears that post-Brexit changes to financial services regulations could result in a ‘race to the bottom’ are “clearly nonsense.”
Earlier this week former business secretary Vince Cable warned that changes to the UK regime could risk a financial crash in a letter signed by a number of other economists.
But yesterday Julian Jessop, an economics fellow at the Institute of Economic Affairs, said “critics of post-Brexit reforms of financial services seem to believe that more regulation is usually better and whatever the EU decides is always best. This is clearly nonsense.”
The government is looking at freeing up pensions funds to invest via changes to Solvency II regulations and has given the financial regulator a mandate to consider growth in its decisions.
Gerard Lyons, from the Centre for Policy Studies, said “the areas in which the UK is looking to diverge will enhance its and the sector’s international competitiveness, not weaken it” and said a better criticism was around the UK’s ambition in the area.
“The City and the wider financial services sector have made it clear it does not want a bonfire of regulations, likewise the Government has repeatedly committed to championing the highest standards. This should not be a concern. This is further helped by the UK having highly regarded regulators who carry weight on the international stage and often lead the debate in shaping regulations at a global level. In short, if any country can be innovative, and agile, while protecting the soundness of the sector – it is the UK,” he said.