The new British Finance Minister Hunt sees Brexit as an opportunity to deregulate the "City of London" again. Rules introduced in 2008 after the financial crisis are to be abolished. This includes the strict separation of high-risk investments from other activities.
Almost three years after Brexit, the London financial sector is to be given new freedom according to plans by the British government. Finance Minister Jeremy Hunt presented a far-reaching package of measures in Edinburgh, Scotland, which envisages various deregulations for banks. According to Hunt, the changes, dubbed the “Edinburgh reforms”, are intended to “exploit new Brexit freedoms”, abolish bureaucracy and boost economic growth.
The sector also wants to open up more to cryptocurrencies. Caps on banker bonuses are removed. Among other things, rules are to be abolished that were introduced in 2008 as security mechanisms after the financial crisis and obliged banks to separate riskier investments from other activities.
But Hunt stressed that banks are in a very different situation today than they were then, dismissing critics' claims that the government was jeopardizing the security of the system. The Confederation of British Industry trade association and representatives of the London banking industry welcomed the announcement.
Regarding cryptocurrencies, according to the “Handelsblatt”, Hunt announced that he would create “a secure regulatory environment for (digital) stable coins” and ensure “that the government has the necessary powers to conduct a broader range of investment-related cryptoasset activities in incorporate UK regulation."
In contrast to other cryptocurrencies, stable coins are said to be characterized by value stability - but have also been affected by drastic price slumps. However, regulation could promote their acceptance.
The opposition accused Hunt of taking too many risks shortly after ex-Prime Minister Liz Truss' disastrous economic policy. "For this to happen after the Tories have taken our economy to the brink is beyond misplaced," said Finance Industry MP Tulip Siddiq.
The City of London has long been Europe's leading financial district - but that has changed with Brexit. Centers such as Amsterdam, Paris and Frankfurt compete with the British capital.
