A senior U.K. lawmaker wants the Financial Conduct Authority and the Prudential Regulation Authority to be in charge of ensuring London's banking and insurance sectors remain competitive across the globe after the country leaves the EU.
The two regulators' predecessor, the Financial Services Authority, had a formal objective to focus on competitiveness, but critics said that responsibility led to regulations being relaxed in the run-up to the financial crisis, Reuters said.
"I strongly argue that now is the time to re-elevate that objective, that there is now a statutory international competitiveness duty alongside prudential supervision," Stephen Hammond, a member of the U.K. parliament's influential Treasury Select Committee, reportedly said at a City & Financial conference. "It's important that we don't dilute standards beyond the internationally accepted, but tests of appropriateness, proportionality and international equivalence are key."
The call comes as the PRA has suspended work on changing a controversial part of the pan-European Solvency II insurance capital regime, drawing disappointment from British insurers. In a letter to the committee, PRA CEO Sam Woods said that while the regulator found a solution to calculating the Solvency II risk margin that had some merit, it does not yet see a durable way to implement a change due to uncertainty surrounding Britain's exit from the EU.
The committee in October 2017 called on the PRA to make changes to how it is applying the Solvency II rules to benefit the competitive standing of British companies, Reuters noted.
