The UK should move further and faster in reforming the framework for banking and finance and the wider ecosystem to reboot UK capital markets and improve the competitiveness of the City of London.
The debate has moved on from alignment with the EU in exchange for future access; instead the UK should focus on closer alignment and cooperation with the US and other markets.
There is a huge growth potential of around 40 percent in UK capital markets which would translate into UK companies raising an additional $75bn (£58bn) a year.
LONDON – April 28, 2022 – The Atlantic Council’s GeoEconomics Center and New Financial today released a groundbreaking report on the future of UK banking and finance. The report proposes a blueprint for how the UK financial system can reboot its domestic markets; retain and enhance its international competitiveness; and develop closer ties with the US and other partners to remain at the center of global finance, deliver growth at home, and strengthen the global economy.
The findings will be presented at a flagship conference in London on Thursday, April 28, featuring remarks by UK Economic Secretary to the Treasury, John Glen MP.
The report’s 62 recommendations emphasize the need for urgent and deep reform of the UK framework for banking and finance and the wider ecosystem. Faster coordinated action on taxation, regulation, and access to world-class talent is needed to ensure the UK remains well ahead of competitors.
William Wright, lead author and managing director of New Financial said: “Brexit provides the UK with an opportunity and an imperative to rethink its role as a banking and finance center. The industry should move on from debating the trade-off between divergence from the EU rule book and access to the Single Market. Instead, our report offers a blueprint calling for a new regulatory framework that is global-facing, dynamic, outcomes-based, and data-led.”
Additionally, the report makes the following key recommendations:
- That the UK and US should build on their already strong partnership in banking and finance to help shape global standards and norms.
- The taxation of financial services should incentivize wider participation and serve competitiveness.
- Prudential policy should help the industry better support the wider UK economy, rather than constrain this.
- A “digital first” approach for the UK to lead global innovation in areas such as data sharing, open banking and digital IDs.
- The sector needs access to world-class talent to ensure the UK remains well ahead of its competitors.
Our analysis indicates that the UK has the potential to achieve as much as 40 percent growth in its capital markets, allowing companies to raise an additional $75 billion per year.
In partnership with CNBC and the Centre for Policy Studies, the April 28 conference at Banqueting House in Whitehall will feature two high-level panels that examine the key domestic and international implications of the report.
The domestic panel will explore how to reboot and reform the UK framework for banking, finance, and capital markets. The panel will feature remarks from Lord Hill, the chair of the UK Listing Review; David Bailey of the Bank of England; Julia Hoggett, Chief Executive of London Stock Exchange plc; and Tracy Blackwell, Chief Executive of Pension Insurance Corporation.
The international panel will discuss recommendations to enhance the international competitiveness of the UK as a financial center. Richard Gnodde, Chief Executive of Goldman Sachs International; Peter Harrison, Chief Executive of Schroders; and Anna Marie Dunn, Chief Financial Officer EMEA at JP Morgan, will all speak on this panel. Both panels will be moderated by CNBC’s Geoff Cutmore. More information and a link to register may be found here.
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