The government will announce measures to stimulate the growth of the financial services sector in the UK and the City of London.
The reforms, dubbed “Big Bang 2.0”, are aimed at making London more competitive after Brexit and will be introduced by Chancellor Jeremy Hunt.
Confirmation is expected to lift the cap on bank bonuses. Separation rules that oblige banks to protect their retail banking services from riskier investments and cross-border banking should also be relaxed.
Another measure reported is a revision of the rules for “senior managers”, which makes senior financial managers personally liable for rule violations unless they take “reasonable steps” to prevent them. Punishments now range from fines to bans.
Ministers hope to free up billions of pounds for investment in UK infrastructure projects, including clean energy networks and the expansion of Heathrow Airport.
But critics fear the reforms will spark a return to risk-taking behavior in casinos, especially on the part of bankers. The rules were originally introduced following a public outcry over bankers’ lack of accountability for decisions that led to the government committing tens of billions of taxpayer dollars to the industry.
The Chancellor, who was scheduled to launch the action in Edinburgh, said: “The country’s financial services sector is the engine of the UK economy, driving innovation, growth and prosperity across the country.
“Leaving the EU provides us with a unique opportunity to transform our regulatory framework and unleash the full potential of our amazing financial services industry.
“We are providing a flexible, proportionate and home-grown regulatory regime that will open up investment in our economy to create jobs and opportunities for the British.”
The chancellor’s supporters insist that this will not mean a return to the practices that contributed to the 2008 crash and that the UK’s regulatory framework will remain strict.
The Chancellor will also give new powers to the Financial Conduct Authority (FAC) and the Prudential Regulation Authority (PRA), outlining how they will contribute to the UK’s growth and international competitiveness.
The government has been widely criticized for proposals that would allow ministers to override regulators, including the Bank of England.
The powers would have given ministers the power to issue, amend or revoke regulations on matters they considered to be of “significant public interest”.
After repeated warnings that such a move would tarnish the UK’s global image, the Treasury confirmed that it “would not resort to intervening powers”, adding that the government would respect the independence of city guards, including the FCA and PRA. must”.
The financial services sector contributes £216 billion to the UK economy each year. This includes £76 billion in taxes. The sector employs over 2.3 million people, of which 1.4 million are outside London.
Source: I News
I am Moises Cosgrove and I work for a news website as an author. I specialize in the market section, writing stories about the latest developments in the world of finance and economics. My articles are read by people from all walks of life, from investors to analysts, to everyday citizens looking for insight into how news will affect their finances.