Treasury Committee launches inquiry into future of UK’s financial services post-Brexit

The Treasury Committee has today launched a new inquiry into the future of the UK’s financial services once it has departed from the European Union (EU).

In a statement, the Committee has said that it will examine what the government’s financial services priorities should be while negotiating the UK’s future trading relationship with the EU and third countries.

Furthermore, it will assess how the UK’s financial services sector can “take advantage” of the UK’s new trading environment with the rest of the world, and whether it should maintain or review the current regulatory barriers that apply to third countries.

Commenting on the launch on the inquiry, Treasury Committee chair Nicky Morgan, said: “London is the world’s premier financial centre, and many of us want to keep it that way.”

According to Morgan, Brexit will have a “significant and long-lasting impact” on the financial services sector, namely the insurance, retail banking and asset management sectors in the UK, the EU, and potentially the rest of the world.

“The UK may converge, seek equivalence, or diverge from the EU. As part of our new inquiry, the Treasury Committee will examine the risks and rewards of each of these choices,” the committee chair added.

Morgan emphasised that the Treasury also wants to explore opportunities “outside Brexit”, such as FinTech, “on which we [the UK] should be capitalising”.

Once the committee has gathered evidence from the industry, regulators, ministers and officials, it will make a series of recommendations to the government and regulators in relation to what they should prioritise in negotiations with the EU and the rest of the world.

Finally, Morgan explained: “We’ll also seek to conclude whether it would be in the long-term interests of the UK to align closely with EU financial rules, or to forgo financial services trade with the EU and pursue trade with other third countries.”

In response to the launch of the inquiry, UK Finance chief executive, Stephen Jones, said: “The UK’s position as a world-leading financial centre post-Brexit is central to our economic and social prosperity. It is crucial that the government, parliament, regulators and the industry all work closely together to preserve it.

“We must avoid fragmentation of global markets in which the UK is a leader, maintain strong and proportionate regulation whilst supporting innovation including in our critical FinTech sector. We also need to ensure the UK’s tax policy is globally competitive.”

Jones stressed that the UK “is and should always seek to be the safest and most transparent place” for financial service providers.

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