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The announcement of the creation of a large financial package known as the ‘Edinburgh reforms’ in December 2022 vowed to be the “UK banking rules biggest shake-up in more than 30 years” and part of the “The Big Bang 2.0’ program”. However, these reforms are currently being branded as “damp squib” by chair of the Treasury committee, Harriet Baldwin, due to its apparent lack of progress and economic significance.
This 31-plan-package was declared to only be possible due to “freedoms of leaving the EU” (Chancellor Phillip Hammond), ambitious pursuits of boosting the UK’s financial services sector in the wake of Brexit, and the overcoming of significant barriers to cross-border trade in financial services which have arisen. Recent news claims that notable companies like TUI have been considering quitting the London stock exchange. This follows Britain’s biggest chip company, Arm Holdings, listing its shares in New York earlier this year. Building supplies firm CRH, and plumbing equipment company Ferguson also shifted listings to the US, threatening London’s position as the leading European financial center.
The proposed relaxation of rules that Britain introduced in response to the 2008 recession and banking crisis has led to fears that it may cause the UK to relapse into a riskier business environment. These measures include: removing the cap on bankers’ bonuses, a relaxation of ring fencing rules which require lenders with more than £25bn in deposits to formally separate consumer operations from their investment banking arms, to protect ordinary customers and promote financial stability.
Whilst many questions have risen around whether it is the correct time to revisit post-2008 rules, the overriding headline is currently on the progression of these reforms.
Image: A pile of coins sitting on top of a table. Coins currency investment, business finance. , pixabay.com, 2016 // CC0 1.0 Deed
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