Jeremy Hunt has announced plans to reform the UK financial sector, in what would be the biggest shake-up of its kind in more than 30 years.
The package of more than 30 regulatory changes - known as the "Edinburgh Reforms" - will replace EU regulation and "cut red tape" following Brexit. The Chancellor said the new measures will "turbocharge" growth in towns and cities across the UK. Rules introduced after the 2008 financial crisis, which saw some UK banks face potential collapse, will be reviewed as well. This includes the “senior managers’ regime”, which holds bosses accountable for financial mistakes, and so-called “ring-fencing” rules, which require banks to separate high street operations from riskier investment operations.
However, critics have cast concern over the potential loosening of these rules. Labour's shadow City minister Tulip Siddiq said rules governing senior management "were introduced for good reason" after the financial crisis. She added: "Introducing more risk and potentially more financial instability because you can't control your back benchers is this Tory government all over. The shake-up will also include a commitment to make "substantial legislative progress" on repealing and replacing the Solvency II directive next year.
Solvency II is an EU directive, retained in UK law, that regulates the insurance industry. The Treasury says replacing this will unlock more than £100billion of private investment. Mr Hunt also promised to reform the UK prospectus regime to support stock market listings and capital raises, reforming rules on real estate investment trusts and reviewing provisions on investment research in the UK.
The Chancellor said: "We are committed to securing the UK's status as one of the most open, dynamic and competitive financial services hubs in the world.”