Future of financial regulation and supervision post-Brexit report debated
05 June 2018
On Wednesday 6 June, the House of Lords debates the EU Committee's report on the future of financial regulation and supervision following Brexit. The report examined how financial regulation and supervision could evolve post-Brexit to ensure financial stability and the options for market access for financial services.
The Committee's report sought to address whether equivalence is the best means of securing market access, the complexities involved in transposing EU financial regulation into UK domestic law, and whether the UK could tailor its regulatory regime to strengthen the sector post-Brexit.
- International standards and EU law has shaped the UK's regulation of financial services. The UK heavily influenced these and it must continue to adhere to international standards and find a way to shape them in future, especially if there is a risk of them being undermined by other states.
- Post-crisis reforms have promoted financial stability and the Government should continue to advocate these reforms, especially if faced with initiatives by the EU that would lead to market fragmentation and a rowing back on the post-crisis commitments, such as current proposals on potential central counterparty (CCP) relocation.
- The translation of EU regulation into domestic law will need delicate handling by the Government. Some rules will need to be enshrined in statute. However, it may be more appropriate in some areas for regulators to issue guidance and set standards. Any future regulatory regime will likely result in a significant increase in the powers of domestic regulators. It is vital that Brexit, in transferring powers to domestic regulators, should not result in an unintended deficit in democratic scrutiny and accountability.
Baroness Falkner of Margravine, Chairman of the EU Financial Affairs Sub-Committee, will open the debate on the report. Lord Bates will respond for the Government.
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