Future of Financial Services (parliament.uk)
Context
Following the United Kingdom’s exit from the European Union, the House of Commons Treasury Committee (HCTC) has released its latest report on the future of financial services regulation as it considers how to review and update laws which are derived from European Union directives. The report recognises the influence of the UK on those directives, in that little change is expected, but that there are opportunities to simplify and deregulate.
Key points to note
The Committee sets out its view that:
- the Treasury should respect the principle of regulatory independence, and must not pressure the regulators to weaken or water down regulatory standards, or to accept changes to the regulatory framework which could impede the regulators’ ability to achieve their primary objectives;
- If regulatory standards were to be changed or substantially weakened so as to increase the risks to financial stability, UK consumers and taxpayers could be harmed;
- simplifying financial regulation and tailoring it appropriately to the UK market must be approached with care, and without compromising regulatory independence; and
- it will remain alert for any evidence that regulators are coming under undue pressure from the Treasury to inappropriately weaken regulatory standards.
The summary to the document includes commentary on, amongst other areas:
- The future overall direction of financial services regulation
- Ease of access to international financial markets
- A proposed growth and competitiveness objective
- Financial inclusion
- The new regulatory framework
- Innovation
The report is lengthy and detailed (at 68 pages), but will be of interest to those interested in the following areas:
- Growth and competitiveness (in part to try to address the difficulties financial services firms have had exporting products and services into the European Union)
- Financial inclusion and the regulatory framework (forward looking, allowing firms to plan, quicker authorisation processes)
- Innovation (allowing firms to be bold if they plan for a worst-case scenario of harm and how they will remediate the harm)
Next actions
None – for information and awareness.