Economists sound the alarm over UK’s post-Brexit finance plans

A view of the London skyline reveals the Metropolis of London monetary district, seen from St Paul’s Cathedral in London, Britain February 25, 2017. REUTERS/Neil Corridor/File Picture/File Picture

LONDON, Might 16 (Reuters) – Greater than 50 economists warned on Monday that Britain’s post-Brexit plans to spice up the competitiveness of its big finance business risked creating the type of issues that led to the worldwide monetary disaster.

The federal government, searching for to make use of its “Brexit freedoms”, introduced this month that it might require regulators to assist the Metropolis of London to stay a world monetary centre after the nation left the European Union. learn extra

The group of 58 economists, together with a Nobel Prize winner and former enterprise minister Vince Cable, mentioned making competitiveness an goal might flip regulators into cheerleaders for banks and result in poor policymaking.

It additionally raised the danger of wounding the true financial system because the finance sector sucks in a disproportionate share of expertise, they mentioned in an open letter to finance minister Rishi Sunak.

“The UK as an alternative wants clear regulatory aims that promote economy-wide productiveness, progress and market integrity, and likewise shield shoppers and taxpayers, advance the battle towards local weather change and sort out soiled cash to guard our collective safety,” the letter mentioned.

Britain’s monetary providers minister, John Glen, has mentioned the brand new competitiveness goal for the Financial institution of England and the Monetary Conduct Authority could be secondary to preserving markets, shoppers and corporations protected and sound.

Banks have sought extra give attention to competitiveness than proposed, however the authorities has confronted push-back from the BoE which has warned towards a return to the “gentle contact” period that ended with lenders being bailed out throughout the monetary disaster.

The signatories of the open letter included Cable, a former chief of the centrist Liberal Democrats, Mick McAteer, a former FCA board member, and Nobel Prize-winning economist Joseph Stiglitz.

Writing by William Schomberg
Modifying by Peter Graff

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