Brexit Britain’s financial stability policy under threat

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The UK government is going to set out a package of post-Brexit reforms to boost its financial services industry, which is claimed by chancellor Jeremy Hunt, to spur competition and growth.

The Edinburgh reforms will outline how the government intends to review, repeal and replace rules introduced in 2008 to prevent a repeat of the 2008 crash, to protect savers and taxpayers.

Today, ministers argue that these protections risk holding back London s banks and insurers as they compete against overseas rivals.

There are changes to include ring-fencing capital rules to lighten the burden on smaller, retail-focused banks, and reviewing the senior managers regime, which held top bankers accountable for their conduct and competence, and for transgressions on their watch.

Hunt is expected to confirm that city regulators will be given a new secondary objective of growth and competitiveness, to run alongside their primary duty of protecting consumers and maintaining financial stability.

That competitiveness and growth objective is controversial, it risks undermining the reputation of Britain's regulators if they aren't seen as focused on keeping the country's financial institutions and markets safe and sound, and running well.

Andrew Griffith, city minister, denied that the govermment is embarking on a race to the bottom by changing City reforms.

Griffith told the Financial Times that it is absolutely the right time to revisit the rules brought in after the 2008 crisis.

Griffith said that the regulations were right for the time.

The banking system is in a much better position in terms of its balance sheet and its understanding of liabilities that it is managing. Here is our preview piece on Hunt's reforms in which my colleague Kalyeena Makortoff explains that Hunt is trying to rebrand what his predecessor, Kwasi Kwarteng, claimed would be a post-Brexit Big Bang 2.0 for the City.

That was a reference to the sweeping deregulations of the 1980s under Margaret Thatcher's administration, which were credited with elevating London as an international financial centre.