LONDON -The Bank of England’s new objective of helping the financial sector remain globally competitive should not encourage risky bets on regulatory standards to win business, BoE executive director Victoria Saporta said on Tuesday.
Britain wants a “Big Bang 2.0” – a reference to deregulation of the stock market in the 1980s which strengthened the financial sector’s global reach – to bolster the City of London following Brexit.
A draft law before parliament gives the BoE and Financial Conduct Authority a new secondary objective of aiding the economy and financial sector’s global competitiveness and growth.
Saporta said the best way to maintain competitiveness is by having a regulatory regime that is open, predictable, transparent and aligned with international standards.
“One thing I want to make clear is that I don’t believe regulators should engage in risky compromises such as regulatory races to the bottom to win business,” Saporta told a City & Financial conference.
Britain’s Finance Minister Kwasi Kwarteng is due next month to outline what he has called an ambitious deregulatory agenda by tearing up some of the financial rules inherited from the EU.
Saporta said alignment with international standards makes it easier for international firms to conduct business in the UK.
“It avoids inefficiencies that would arise from international firms having to comply with a different set of rules when they operate here,” she said.
Financial centers are more competitive when their regulators have a good reputation for being independent, Saporta said.