Kwasi Kwarteng promises Big Bang 2.0 reforms to boost City of London

Kwasi Kwarteng, the UK’s new chancellor, has told senior financial services executives he wants a “Big Bang 2.0” in the City of London and to overhaul regulation to enhance the sector’s competitiveness.

In one of his first official acts, he met with around 14 chief executives and senior figures from banks, insurers and asset managers.

They included Richard Gnodde, CEO of Goldman Sachs, Beatriz Martin, CEO UK and group treasurer of UBS Group and Viswas Raghavan, CEO EMEA and co-head of global investment banking, JP Morgan Chase & Co.

In addition, there was Amanda Blanc, chief executive officer of insurance firm Aviva; Charlie Nunn, head of Lloyds Banking Group,  Alison Rose, CEO of NatWest Group Plc; and Nigel Wilson, CEO of Legal & General Group Plc.

“The Prime Minister and I are committed to taking decisive action to help the British people now, while pursuing an unashamedly pro-growth agenda,” Kwarteng said in a statement after the meeting.

This is not a new initiative in that former Chancellor Rishi Sunak also talked about Big Bang 2.0,  a reference to the deregulation of stock trading in the 1980s which placed the City of London at the heart of Europe’s financial industry.

He designed a  financial services bill, drawn that is progressing through parliament and would give ministers the power to challenge decisions by City regulators if they feel their decisions are holding back competitiveness.

Bank of England governor Andrew Bailey has expressed concerns that the bill, which received its second reading in the House of Commons yestderday, would undermine regulatory independence.

The chancellor sought to calm these fears following questions about its independence during the Conservative leadership campaign and criticism of its record on inflation. Kwarteng “reiterated his full support for the independent Bank of England” at the meeting, the Treasury said.

Overall though. city executives are worried that sweeping reforms could be taken too far and they advocate a much more thoughtful approach. They arguie that too much cutting of red tape will increase costs and cause confusion.

Miles Celic, chief executive of TheCityUK, the financial services lobby group, said that any radical regulatory changes “must be taken in close discussion with industry and recognising that in many areas such regulation is international in nature”.

©Markets Media Europe 2022

 

 

 

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