UK financial services body urges ‘regulatory diplomacy’ to improve market access
In its latest report titled International Trade in Financial Services, UK Finance had set out seven recommendations, starting with the fact that UK regulators to work with their counterparts in other countries for improved market access. “The aim of this would be to encourage other countries to open their domestic markets to UK-based financial services providers and promote cooperation in innovative areas such as AI, cybersecurity and fintech,” stated the report.
The UK is the world’s largest net exporter of financial services, above the United States and Switzerland, with a financial services trade surplus of $77bn (approximately £60.3bn) in 2019, with the banking and finance industry currently employing over one million people across the UK, reminded UK Finance.
The body, which has representation from top international banks, has also recommended that the UK to use its position at key international bodies such as the Financial Stability Board (FSB) and the Basel Committee to strive for global convergence in financial standards. This convergence will make it easier for firms to operate across different countries.
The banking and finance sector is a significant contributor to the UK economy. The industry’s trade surplus is vital, and we are keen to work with the government and regulators to increase these benefits for the UK, said David Postings, Chief Executive of UK Finance. “We are setting out the tools available to policymakers to achieve this, from using regulatory agreements and free trade deals to open up new markets overseas to playing a leading role at global standard-setting bodies like the WTO and Basel Committee. The UK should seize the opportunity to be a global champion for free trade in financial services, building on our strengths as the world’s most open and international financial centre,” added Postings.
The other recommendations set out in the report include building a network for formal platforms for regulatory and supervisory cooperation, pioneering the innovation and expansion of cross-border trading models based on recognition and using a new set of free trade agreements (FTAs). It also calls for the UK to champion a range of World Trade Organisation (WTO) initiative to support trade in financial services and sustain the UK’s openness to imported financial services.