The UK government has unveiled a revamp of financial regulations in the country in a move to strengthen the country’s financial status post-Brexit.
According to Euro News, the UK’s departure from the EU put up barriers to financial business with the continent and has boosted competition from Paris, Amsterdam and Frankfurt – with Amsterdam overtaking London to become Europe’s top share trading centre. However, London remains the largest financial services centre overall.
Chancellor Jeremy Hunt said that the government was using ‘Brexit freedoms’ to make the country more competitive and that the reforms would make the UK one of the most ‘open, dynamic and competitive financial services hubs in the world’.
The revamp – labelled the ‘Edinburgh Reforms’ after where Hunt unveiled the package of over 30 measures, included lifting a cap on banker’s bonuses, easing capital requirements for smaller lenders and a review of the UK’s senior managers regime to enable bankers to be held accountable for their decisions.
Furthermore, the government will relax ringfencing rules intended to separate investment banking from retail operations and will have a plan for repealing and reforming EU rules dating back from the UK’s membership of the EU.
Earlier this year, Visa and Mastercard cited fraud and increased competition to justify post-Brexit fee increases on cross-border payments from the UK.
Back in 2021, the two firms increased cross-border interchange fees on purchases made by UK consumers to European firms. Fees climbed from 0.2% to 1.15% for debit cards and 0.3% to 1.5% for credit card transactions.
This move caused ‘uproar’ in UK Parliament and led to a market review by the Payment System Regulator, which said it has not seen evidence that shows that there have been significant changes in the costs for card issuers.
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