LONODN (CNBC) -The UK government on Friday announced extensive reforms to financial regulation that it says will overhaul EU laws that “choke off growth.”
The package of 30 measures includes a relaxation of the rule that requires banks to separate their retail operations from their investment arms. This measure — first introduced in the wake of the 2008 Financial Crisis — would not apply to retail-focused banks.
The government also confirmed it will review rules around the accountability of top finance executives — another post-2008 regulation. The Senior Managers Regime, introduced in 2016, means individuals at regulated firms can face penalties for poor conduct, workplace culture or decision-making.
Changes announced in the package, dubbed the Edinburgh Reforms, also include a review of rules on short-selling, how companies list on the stock exchange, insurers’ balance sheets and Real Estate Investment Trusts.
Finance Minister Jeremy Hunt said he wanted to ensure the UK’s status as “one of the most open, dynamic and competitive financial services hubs in the world.”
The government is billing the reforms as a way to capitalize on freedoms offered by Brexit, stating that hundreds of pages of EU laws governing financial services will be replaced or scrapped.
Many argue that Britain leaving the EU has damaged the country’s financial competitiveness, with Reuters reporting that London lost billions of euros in daily stock and derivatives trading to EU exchanges following its departure from the bloc. Researchers at the London School of Economics said earlier this year that financial services will be among the sectors worst hit by Brexit.
Seeking to boost the UK’s sluggish economic growth has also become a priority for the government, with the country forecast to be on the brink of a long recession.
The previously-announced removal of the UK cap on bankers’ bonuses was one of the few policies announced by Hunt’s predecessor, Kwasi Kwarteng, that remained after his chaotic “mini budget.”
Kwarteng had promised a “Big Bang 2,” referring to the deregulation of the London Stock Exchange in the 1980s, which attracted a host of global banks and investment firms to the UK and rapidly increased the size of the City of London’s financial sector.