Jeremy Hunt denies relaxing financial regulations 'is reckless'
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Jeremy Hunt has vowed to help the Square Mile take on the Big Apple in a Brexit boost which will see a raft of reforms strengthen the City’s competitiveness. The Chancellor of the Exchequer, who previously campaigned for the UK to stay in the European Union, pledged to use post-Brexit powers to loosen bank ring-fencing, relax rules on executive accountability, boost pension fund investment and reshape the Bank of England’s regulatory role. Mr Hunt unveiled more than 30 changes for the Square Mile and over a third have only been possible because the UK opted to cut ties with Brussels.
The Chancellor told the Telegraph: “Our competition is not really with Paris or Frankfurt, it’s with New York and Singapore and Shanghai.
“What this package of Edinburgh reforms demonstrates is that we aren’t complacent.
“Our competition is with other financial centres and this is us showing that we are going to be nimble, adaptive, and hungry for business all over the world.”
He added: “Brexit makes some of the things that we’ve announced easier because we have regulatory autonomy so we are taking advantage of that to make sure the City is even more competitive.”
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Arundel & South Downs MP Andrew Griffith, who serves as the Economic Secretary to the Treasury, joined Mr Hunt in the Scottish capital to meet with business leaders.
He claimed: “It’s a package which is going to make the United Kingdom more competitive, have more agile regulation that’s fit for now.
“It’s part of a number of ways this Government is going to grow the economy, create prosperity and generate the tax revenues that pay for our high quality public services.”
The Chancellor also lauded the Square Mile for showing its “mettle” by exceeding some of the expectations made following Brexit.
However, the architect of the reforms established to prevent a repeat of the 2008 financial crash has claimed Mr Hunt’s rule changes could “rebound on us very badly”.
Sir John Vickers said: “The competitiveness of the whole economy needs banks that are extremely well-regulated with very strong capital buffers, and properly structured banks, as ring-fencing provides.
“It does not need chiselling away at those protections for the rest of the economy, which could rebound on us very badly.
“We saw that absolutely clearly 15 years ago, and let us not forget the costs of that that we’re still living with.”
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Opposition parties have also taken aim at the Conservative Government over its post-Brexit reforms.
Liberal Democrat MP Sarah Olney described the move as a “race to the bottom”.
Labour’s Shadow City Minister Tulip Siddiq added: “Introducing more risk and potentially more financial instability because you can’t control your backbenchers is this Tory Government all over.”
The Square Mile has witnessed a change in its trading situation with the EU since the Government pulled the UK out of the bloc’s single market.
Amsterdam even overtook the London as Europe’s largest trading hub last year.
However, EY’s Brexit Tracker concluded that job losses have been lower than expected.
In its report published in March, EY’s financial services leader Omar Ali said: “In the months following the referendum, financial firms voiced their intentions to bolster EU subsidiaries, move staff abroad and relocate headquarters in preparation for all possible scenarios.
“As firms gained greater clarity on what the post-Brexit landscape would look like, plans were consolidated and, in some cases, firms revised down the number of people they would need to relocate.”
Despite EY’s findings from March, Goldman Sachs is reportedly looking to transfer parts of its Euro swaps trading team from London to Milan.
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