FILE PHOTO: The City of London financial district is seen in London, Britain, October 22, 2021. REUTERS/Hannah McKay
February 4, 2022
By Huw Jones
LONDON (Reuters) – Britain must ditch plans to make regulators “cheerleaders” for global finance and instead focus on promoting financial inclusion at home, consumer campaign groups said on Friday.
The finance ministry is reviewing financial rulemaking after Britain’s departure from the European Union, and has proposed giving the Bank of England and Financial Conduct Authority a secondary objective of promoting the international competitiveness of finance.
“Asking regulators to take on this task risks eroding their independence,” the 37 campaign groups and charities said in a joint statement.
“Balanced input from industry and civil society advocates, with the regulators acting in the public interest and maintaining independence, is more likely to produce well-designed regulation that delivers better outcomes.”
The charities include the Centre for Responsible Credit, the Financial Inclusion Centre, Greenpeace, Stamp out Poverty, Positive money, Tax Justice System and Finance Innovation Lab.
Financial rules were written in Brussels when Britain was an EU member, and some lawmakers want the UK to use Brexit “freedoms” to ease rules in one of Britain’s biggest export sectors.
Brexit means the industry has been largely cut off from the bloc, which is now a competitor.
The finance ministry has said Britain will adhere to high international standards and not return to the “light touch” regime seen before the 2007-2009 global financial crisis when taxpayers bailed out UK banks.
Finance should help Britain meet carbon neutral goals and ‘level up,’ meaning closing wealth disparities between regions, the charities said, adding there should be a statutory duty for regulators to promote financial inclusion.
There should also be mandatory registration of all lobbyists and regular reporting of their activities, they added.
“Now that the financial crisis is over a decade behind us, banking lobbyists are agitating for a relaxation of the very regulations that are designed to keep our money safe,” Vince Cable, a former business minister, said in the joint statement.
(Reporting by Huw Jones; Editing by Mark Potter)