UK lawmakers want stricter ‘competitiveness’ remit for regulating finance

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© Reuters. A view of the London skyline, Britain, October 14, 2020. REUTERS/Matthew Childs
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LONDON (Reuters) – British government plans to give financial regulators a competitiveness remit post-Brexit risk being ignored unless backed by clear performance yardsticks, a committee from parliament’s upper house said on Thursday.

The finance ministry has said the Financial Conduct Authority and the Bank of England’s Prudential (LON:PRU) Regulation Authority will get a secondary objective to avoid crimping the financial sector’s global competitiveness when writing rules.

Britain’s financial sector was largely cut off from the European Union after Brexit and bankers want regulators to help keep the industry internationally attractive.

Following a series of public hearings, the House of Lord’s industry and regulators committee said in a letter to financial services minister John Glen on Thursday that an extra remit alone won’t be enough.

“Consequently, we recommend that alongside introducing a competitiveness objective for the PRA and FCA, it will be essential to establish clear criteria and appropriate performance measures,” the committee said.

Without this, there is a risk the objective could be ignored or have little impact, it said.

A broader reassessment of regulatory culture was also needed to keep rules proportionate and improve how regulators engage with industry to allow constructive and public challenge to planned rules, it added.