By Huw Jones
LONDON (Reuters) -Britain should move further and faster in reforming its financial rules to ‘reboot’ after Brexit by aligning with key markets in the United States and elsewhere, a report from two think tanks said on Thursday.
Britain has already launched over 30 public consultations, including on reforming insurance rules on Thursday, to keep London a globally competitive financial centre after being largely cut off from the European Union due to Brexit.
“The debate has moved on from alignment with the EU in exchange for future access. Instead, the UK should focus on closer alignment and cooperation with the U.S. and with other markets around the world,” the joint report https://newfinancial.org/report-the-future-of-uk-banking-and-finance from New Financial in London and the Atlantic Council in Washington said.
Britain should focus on “low-hanging fruit” such as faster tweaking of inappropriate rules inherited from the EU, but be wary of going above and beyond standards implemented internationally, the report said.
Banks have welcomed draft reforms so far but want a faster pace given that many will need legislation, which takes time.
The report said Britain’s capital markets have the potential to grow by up to 40% if it can close the gap with the United States, this equates to an additional $75 billion annually.
Britain’s financial services minister John Glen told a launch event for the report that he shared its ambition for closer U.S. ties as he brought in “sweeping reforms” to sharpen London’s competitiveness.
“There is a real opportunity for us to work together to shape the international financial services regulatory framework,” Glen said.
Britain’s “default setting” will be a willingness to welcome new talent, capital and ideas by offering a range of visas and keeping taxes on banks fair, he said.
There is already a UK-U.S. base to build on with more dollars traded in London than in New York, the report said. Britain and the United States combined account for over 80% of the global market for hedge funds, commodity derivatives and interest rate swaps.
(Reporting by Huw Jones; Editing by Toby Chopra)