Bank of England and UK finance ministry divided over metropolis regulation after Brexit – FT

LONDON (Reuters) – Britain’s finance ministry and the Bank of England are at odds over methods to regulate monetary providers within the City of London after Brexit, the Financial Times reported on Monday, citing unnamed officers.

FILE PHOTO: The Bank of England is seen in London, Britain, April 9, 2018. Picture taken April 9, 2018. REUTERS/Hannah McKay/File Photo

Finance minister Philip Hammond favours an strategy that may hold Britain near the European Union after Britain leaves the bloc, however the central financial institution doesn’t need to be left as a “rule-taker”, based on the report.

“It is very, very bad. The bank wants to have as much control as possible and doesn’t want to be a rule-taker,” the FT quoted one BoE official as saying. Another stated there was a concern that the finance ministry “is going to give it all away”.

The Bank of England (BoE) declined to touch upon the report.

The BoE and the finance ministry, recognized in Britain because the Treasury, had each backed “mutual recognition” as the premise of a deal in monetary providers, which means shut co-operation between regulators and monetary policymakers would see British and EU rules recognised by the opposite occasion.

FILE PHOTO: Britain’s Chancellor of the Exchequer Philip Hammond arrives at a gathering of regional leaders of the monetary providers in Halifax, Britain, May 17, 2018. REUTERS/Craig Brough

However, the EU’s chief negotiator on Brexit Michel Barnier stated final month the bloc’s current system of market entry for overseas monetary companies may work properly for Britain after it leaves the European Union, decreasing the possibilities that Britain’s monetary sector will get the bespoke deal that London is hoping for.

The seek for a plan B has uncovered the divisions between the BoE’s deputy governor for monetary stability Jon Cunliffe and the Treasury on the problem, the FT stated.

A spokesman for the Treasury stated it was united with the Bank of England in aiming to make sure the steadiness and prosperity of the economic system.

“We are working together to ensure that the UK continues to remain the pre-eminent financial services centre of the world,” the spokesman stated. “We agree the United Kingdom cannot be an automatic rule-taker.”

Reporting by Alistair Smout; enhancing by Andrew Roche

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