Now free from the restrictions of the EU, the All-Parliamentary Group for financial services, stated the Government must now use this newfound freedom to keep the sector ahead of the EU. The financial services sector provides £130billion a year and in order to sustain that, the report from MPs claimed Westminster must not shy away from striking out on its regulatory framework. Despite the threats from the EU that it will levy tariffs against the UK if it steers away from regulatory alignment, the report stated MPs must now “set the regulatory framework” for the sector now powers have been returned from Brussels.
In the report released today, chair of the group and Tory MP for Hitchin and Harpenden Bim Afolami said: “The United Kingdom’s departure from the European Union provides our financial services sector with a remarkable opportunity to enhance its already world-class regulatory framework – ensuring it continues to implement the highest standards and remains a globally competitive financial centre for years to come.
“As many readers of this report will know this is not only desirable but essential, as few industries see such fierce rivalry from international competitors or innovate quite as rapidly.
“So, if the UK’s financial services sector is to stand any hope of remaining ahead of the chasing pack, it must urge government to take this chance and hone its regulatory setting.
“Using our departure from the EU as the catalyst for the right framework is no bad thing, and emphasis should be placed on the benefits for everyday users of financial services, as well as the country at large.
“If we are to continue benefiting from having a world-leading sector based in the UK, we must do our best to allow the right conditions for it to thrive.
“Chief amongst these are making sure Parliament is equipped to play a key role in setting the regulatory framework for financial services, now powers have been returned from Brussels.”
Although financial services remains a large part of the UK economy, the EU did not grant equivalence to firms.
Equivalence refers to a decision from a state to recognise the other’s legal requirements for regulating a good or service.
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Although the UK has not been given financial equivalence, some officials have stated Britain must move away from the EU market and look towards new financial hubs in South East Asia.
Indeed, those claims were echoed by Barclays boss, Jes Staley who stated Brexit could be a major benefit for the City of London.
He added: “What London needs to be focused on is not Frankfurt or not Paris.
“It needs to be focused on New York and Singapore.”
Although he stated relations with the EU should be maintained, he warned future prospects will be based on new global markets and green technology.
Foreign Secretary Dominic Raab also said: “I don’t accept the binary zero-sum war of attrition what matters to the UK and the City is the comparative advantage we have on the fundamentals.
“The challenge to London as a global financial centre around the world will come from Tokyo, New York and other areas rather than those European hubs.
“Particularly if they start to erect barriers to trade and investment.”