As the transition period of Brexit is going on, the UK has to take the necessary steps to keep up with financial market competition and needs to deepen ties with growth markets in Asia – says a recent study report by New Financial.
Britain no longer has to comply with the rules of the European Union after December 31. Being accounted for nearly one-third of the financial activity in the EU, it has to take action now to adjust to the change.
New Financial said in its study “Beyond Brexit,” supported by Barclays bank, that leaving the EU would be a major change and involve significant disruption for the banking and finance industry’s relations with the bloc.
The study stated that Britain is unlikely to get much access to the EU financial market but will be a “free agent” that can use its expertise in derivatives, trading, fintech, and sustainable finance to shape global standards.
The study added, “while the geopolitical backdrop is acutely challenging we think there is an opportunity to develop trade in financial services and closer partnerships with markets like the U.S., Japan, Switzerland, and other smaller markets such as Singapore and Australia”
The study recommended the subsequent relevant points:
- Big, strategic decisions will be needed but a moratorium on substantial divergence from EU rules for a minimum of a year would allow banks to adjust to the new world.
- Tweaks to bank and insurance capital requirements, taxation, and supervision would help London stay competitive globally.
- Britain should form a commission to review the competitiveness of the UK financial sector.
UK regulators have pushed back against calls from lawmakers to tend a proper remit to keep London’s financial competitiveness in mind when writing new rules.
The study comes before the anticipated publication of the government’s financial services bill starting a post-Brexit model for regulating finance and keeping it competitive.