Britain to set benchmarks for financial watchdogs to keep City competitive

Britain’s finance ministry on Tuesday called for advice on setting benchmarks for regulators to ensure they meet a new objectives to support London’s post-Brexit competitiveness as a global financial centre and aid UK growth.

Fierce competition from New York in company listings, and Amsterdam overtaking London as Europe’s biggest stock market post-Brexit, has ratcheted up pressure on UK financial watchdogs to ease rules.

The ministry has dismissed talk of diverging from high international standards or crimping day-to-day independence of watchdogs.

The government said on Tuesday it wanted to ensure that the more powerful role for the Financial Conduct Authority and Bank of England’s Prudential (LON:PRU) Regulation Authority was made accountable to the public by setting “metrics” they must comply with each quarter.

The financial sector sees the new competitiveness remit as key to more nimble and proportionate regulation, with the ministry having new powers to direct regulators to publish information, such as on how it decided on a particular rule.

“The government agrees that clear and regular public metrics to measure performance against are an important part of the transparency that is crucial for effective scrutiny and accountability,” the ministry said in a public consultation paper on Tuesday.

The call for proposals is intended to help determine what additional metrics are most appropriate for the regulators to publish, it said.

“Properly implemented, this will be a key piece of the puzzle to making certain that the regulators’ new growth and international competitiveness objective helps keep the UK a world-leading international financial centre,” said Miles Celic, CEO of TheCityUK.

The London Market Group, which represents insurers, said it was critical for swift metrics to benchmark UK rules against global competitors, particularly when it comes to timeframes for authorising and approving companies.

Etay Katz, partner at Ashurst law firm, said UK watchdogs already had a huge and growing workload.

“Setting performance metrics will not aid genuine and sustainable progress and at worst will encourage regulators to ‘game’ the system,” Katz said.