London, Friday 9th December 2022
The Treasury has today set out the next phase of its plans to shake up the financial sector and replace key aspects of the EU regulatory regime.
Key announcements include a review of the “ring-fencing” regime introduced after the 2008 financial crisis to separate banks’ retail services from riskier investment arms.
The government also committed to consulting on a Central Bank Digital Currency, as well as extending tax exemptions for international investment management to cryptoassets.
A year on from Rishi Sunak’s promise to make the UK the world’s first ‘Net Zero Financial Centre’, the Treasury has committed to publishing a delayed update to its ‘Green Finance Strategy’ in early 2023, and plans to consult on bringing Environmental, Social and Governance (ESG) ratings providers into the regulatory perimeter.
Fran Boait, executive director at Positive Money, commented:
“Behind the spin, today’s announcements amount to wide-ranging deregulation that threatens to destabilise an increasingly fragile financial sector, offering huge risks and little benefit to the wider public.
“Ring-fencing for banks was one of the few protections brought in after the 2008 crisis, so for the government to be watering down these rules is extremely concerning.
“With new objectives for regulators to promote the ‘international competitiveness’ and growth of the financial services sector, we are likely seeing only the beginning of a race to the bottom on standards.”
- Edinburgh Reforms hail next chapter for UK Financial Services, HMT, 9 December 2022: https://www.gov.uk/government/news/edinburgh-reforms-hail-next-chapter-for-uk-financial-services
- 75 leaders from civil society and academia wrote to the government in June setting out 5 key principles for an ambitious Green Finance Strategy: https://positivemoney.org/2022/07/joint-statement-green-finance-strategy/
- A coalition of civil society organisations and researchers has been campaigning against the proposed regulatory objectives to promote growth an international competitiveness: https://financeforourfuture.org/resources
Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. www.positivemoney.org
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