On March 23, the United Kingdom’s House of Commons Treasury Committee published the Bank of England’s (BoE) ‘written evidence’/responses to a UK Government inquiry into the post-Brexit future of financial services in the United Kingdom (the Response).
The Response’s commentary is structured as follows:
- Part one covers questions relating to the future regulatory framework for the United Kingdom.
- Part two covers questions relating to the United Kingdom’s position as a global financial center, and its relationships with other jurisdictions.
- Part three discusses how the UK regulatory regime can support innovation, competition and proportionality.
Points of note include:
- Strong standards are at the center of the BoE’s approach to UK regulation.
- Leaving the European Union provides the United Kingdom with an opportunity to tailor its approach to financial services policy and regulation. This should consider how regulation can facilitate innovation, so that the United Kingdom can seize opportunities from new areas of growth and productive investment in financial services as they emerge, especially as such features are also supportive of long-term resilience. This could include digitization of the economy and FinTech.
- Regulation should promote competition.
- “Safe openness” for those firms from other jurisdictions who are seeking to access the UK market, based on international collaboration and standards, will be a key element in the United Kingdom’s future success. This approach ensures that the BoE can support openness, while mitigating the risks through regulatory assessments of deference, regulatory and supervisory co-operation, and a commitment to common international standards.
- The BoE agrees with the UK Government that there are significant benefits from a model where the technical details of regulatory standards are set by expert, independent regulators. Such a model puts a particular weight on the regulators acting in a transparent and accountable way. The UK Parliament will have a vital ongoing role in any future framework, as it is the body that holds the regulators to account for achieving their objectives. The BoE is committed to helping Parliament fulfil this role.