Weakening UK regulators would hurt financial services, Bank of England warns

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Weakening the independence of regulators would undermine reforms aimed at strengthening Britain’s financial sector, the head of the Bank of England said on Thursday, in a rejection of proposals by the country’s leading candidate for prime minister.

The Conservative government proposed a host of reforms last month in a bill aimed at boosting London’s appeal to global investors in the wake of Brexit, increasing insurers’ investment in infrastructure and regulating certain cryptocurrencies. assets.

On Wednesday, the Financial Times reported that Liz Truss, the favorite to succeed Boris Johnson as prime minister next month, would add new powers to the bill, giving ministers the ability to override financial regulators like the Bank of England (BoE), if deemed to be in the public interest.

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BoE Governor Andrew Bailey said in a letter to Parliament’s Treasury Select Committee that he welcomed the Financial Services Bill as originally proposed, which aims to “establish a robust approach , responsive and internationally respected” to regulate financial services in Britain.

“Regulatory independence is important not least because our international position, and therefore the competitiveness of the UK financial sector which the reforms aim to improve, depends on it,” Bailey said.

“Anything that weakens the independence of regulators would undermine the goals of the reforms,” ​​Bailey added in the letter dated July 27 and released by the commission on Thursday.

Bailey said the BoE’s banking regulatory arm would release a working paper next month, setting out the BoE’s vision for implementing the reforms as they currently stand in terms of high standards, accountability to parliament, stakeholders and the general public.

(Reporting by Huw Jones; Editing by Sinead Cruise and Mark Potter)

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