Britain’s finance ministry should avoid crimping the independence of monetary regulators by overloading them with requests for post-Brexit rule amendments, UK lawmakers said on Tuesday.
Having fully left the ecu Union at the top of December, Britain can now write its own financial rules because it seeks to sharpen London’s competitiveness as a number one global financial centre.
Some shareholder groups have suggested this might cause lower standards, but Tuesday’s report from parliament’s Treasury committee said that the independence of regulators from political interference must remain a key element of UK financial services regulation.
“The committee doesn’t believe there’s compelling evidence for legislating to permit ministers absolutely the right to ascertain regulators’ policy proposals before they’re published for consultation,” the report said.
“Regulators must be liberal to choose what they share with the Treasury.”
A call from some lawmakers to impose a broad requirement on regulators to require the City’s global competitiveness under consideration when fashioning rules made little headway.
Instead, the ministry now has powers to need , if need be, the Financial Conduct Authority to “have regard” to certain factors like competitiveness or global climate change when designing rules for a selected activity.
“But the govt should be sparing in its approach,” the report said, adding that such demands are already forcing regulators to settle on which factors to prioritise.
Britain has slotted rules inherited from the EU into UK law and therefore the report backs plans to shift them into FCA rulebooks, meaning that a time-consuming change in law wouldn’t be needed for future adjustments, allowing regulators to reply nimbly to plug evolution.