Industry Leader Emphasizes that Britain’s Financial Regulators Must Adopt an Ambitious Mindset

by IS_Indust

An industry body stressed on Thursday that British regulators require an “ambitious growth mindset” to accelerate the implementation of post-Brexit financial sector reforms, preventing businesses from relocating elsewhere. Proposed by finance minister Jeremy Hunt over a year ago, Britain’s “Edinburgh Reforms” aim to ensure London’s sustained competitiveness as a global financial hub following its disconnection from the European Union. This week, the EU approved legislation mandating the relocation of euro clearing from London to the bloc.

New York is increasingly becoming a destination for British companies seeking to list. The Edinburgh Reforms have been positively received by the industry. However, Bruce Carnegie-Brown, chair of TheCityUK’s leadership council, emphasized that effective government policies require regulators to adopt an equally ambitious growth mindset. He made these remarks during a dinner attended by Finance Minister Jeremy Hunt.

This involves expediting the approval process for senior hires, according to Carnegie-Brown. Regulators require banks and insurers to subject senior hires to thorough “fit and proper” assessments. Carnegie-Brown, who also serves as chair of the Lloyd’s of London insurance market, noted that while Lloyd’s can assess and approve a new underwriting syndicate within 30 days, external regulators often take several months to reach a decision. This delay prompts businesses to establish themselves outside the UK.

“When it comes to senior management appointments, a US financial services firm seeking to hire a new Head of its UK operations—a role typically among the top ten positions in their organization—can reach a decision within weeks. However, regulatory stipulations concerning senior managers could delay their approval for at least three months, often longer,” noted Carnegie-Brown. The Bank of England and Financial Conduct Authority now have an additional secondary objective to factor in the City’s global competitiveness and growth when formulating regulations.

BoE Deputy Governor Sam Woods faced scrutiny from lawmakers on Wednesday to accelerate the Edinburgh Reforms. However, he emphasized the importance of regulators aligning with government initiatives to provide the industry with a comprehensive solution. “We are progressing at a satisfactory pace,” Woods stated. He highlighted that the backlog in top hire approvals has been addressed, with the Bank handling 98% of applications within the three-month deadline in the final quarter of 2023.

Related Posts

Leave a Comment