Jeremy Hunt is launching major reform of the UK’s banking industry with plans to rip up red tape and replace reams of EU regulations.
The chancellor claimed that Britain had a “golden opportunity” to use Brexit to reshape the rules governing the financial sector.
Mr Hunt will set out a package of more than 30 major regulatory reforms in Edinburgh on Friday, with plans to “review, repeal and replace” hundreds of pages of EU regulations.
The chancellor is promising to examine areas ranging from disclosure for financial products to prudential rules. Any regulations deemed to hold back growth or that put companies off listing in the UK will be overhauled.
The government is also set to announce radical changes to ring-fencing rules, which currently require large banks to separate retail and investment arms.
The so-called “Edinburgh reforms” come as the government attempts to end the nation’s sluggish record on growth, after Liz Truss and former chancellor Kwasi Kwarteng promised a similar plan dubbed “Big Bang 2.0”.
The previous push was a reference to Margaret Thatcher’s 1986 “Big Bang” policies which kicked off a massive deregulation in the City of London.
“This country’s financial services sector is the powerhouse of the British economy, driving innovation, growth and prosperity across the country,” Mr Hunt said.
“Leaving the EU gives us a golden opportunity to reshape our regulatory regime and unleash the full potential of our formidable financial services sector.”
Mr Hunt, who will meet with finance chiefs in Edinburgh, said the government was delivering an “agile, proportionate and home-grown regulatory regime which will unlock investment across our economy to deliver jobs and opportunity for the British people.”
The government is also set to announce radical changes to ring-fencing rules, which currently require large banks to separate retail and investment arms.
In his autumn statement, Mr Hunt previously pledged to reform Solvency II, referring to the multi-trillion pound insurance sector, which will ease capital rules for the industry.
The Treasury said that reforms will build on that pledge, with the chancellor also expected to issue new mandates to the Financial Conduct Authority and the Prudential Regulation Authority.
Mr Hunt last month rejected the forecasts of his own economic watchdog –saying he does not accept Brexit “will make us poorer”.
Asked about Office for Budgetary Responsibility analysis predicting a 4 per cent slump in growth in the long-term – wiping £100bn from output – the chancellor replied: “I don’t accept the 4 per cent.”
