UK regulators need global 'competitiveness' remit, says UK Finance body

By Huw Jones

LONDON, Feb 22 (Reuters) - Keeping the City of London
competitive should be an "across the board" objective for
Britain's financial regulators after Brexit, a UK banking
industry body said in a paper published on Monday.

Britain's finance ministry is consulting on future financial
regulation after the UK's departure from the European Union cut
the City off from the bloc's financial markets but left it free
to set its own rules as it competes with New York, Singapore
and, indeed, the EU.

UK Finance, which represents high street banks, said the
international competitiveness of UK banking would be enhanced by
more proportionate regulation.

Mindful that the Bank of England is opposed to a formal
competitiveness objective which would require it to consider the
ability of UK banks to compete globally, the finance ministry
has suggested some activities could be subject to less red tape
like burdensome reporting requirements.

"The sector is of major importance to the UK economy, and
this calls for international competitiveness to be a principle
to which the regulators must have regard across the board and
not just in respect of specific activities," UK Finance said.

Consumers have faced a string of financial scandals, from
pensions to the mis-selling of payment protection insurance,
piling pressure on regulators to better protect them.

However, UK Finance took a more qualified stance, saying
regulators should also remind consumers that they bear
responsibility for their decisions.

Britain's regulators are funded by levies on financial firms
and UK Finance said annual requirements have risen by 11.5% over
the past four years to nearly 900 million pounds.

"We therefore believe there is merit in reviewing the
overall cost of regulation, in particular compared to that in
other major financial centres, to ensure it does not act as a
disincentive for firms to do business in and from the UK," it
said.

Any significant divergence from EU regulations could scupper
attempts to secure an 'equivalence' ruling which would allow
some UK banks and financial institutions to directly serve
clients in the bloc again.
(Reporting by Huw Jones; Editing by Kirsten Donovan)