Letter: Brexit in Britain is a chance for financial services reform

Reports that ministers and industry leaders are concerned about the pace of financial regulatory review in the UK (“Rees-Mogg urges speedy rewrite of financial rules”, report, 21 February) point to the importance of the forthcoming proposals concerning the capital of banks and insurers for the economy as a whole.

What these views underplay, however, is how different the UK’s financial services regulatory environment will be after it leaves the EU.

The EU establishes financial regulation through a legislative process that can take two years or more. Since Brexit, the UK plans to delegate more regulation to regulators and ensure that revisions can be consulted and adopted much more quickly.

So while the EU may have been the first to propose revisions to Solvency II and the Basel capital framework, that doesn’t necessarily mean it will cross the finish line first.

Moreover, not all future initiatives will necessarily be deregulated. Some, like the implementation of Basel 3.1, will actually impose new requirements on banks. Deciding how to design these rules in a way that also allows the economy to thrive will require careful impact assessment – ​​the UK’s new, more nimble regulatory process should allow plenty of time and leeway for this.

A resilient financial services sector is essential to the country’s competitiveness and the well-being of its people.

If regulators, politicians and industry can work together to reform the capital regime to promote these broader interests, that will be the real price.

David Strachan
Head, Emea Center for Regulatory Strategy, Deloitte, London EC4, UK

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