Rishi Sunak to weaken City regulation in post-Brexit nod to Tory donors

theguardian.com:

Rishi Sunak has moved to weaken regulation of financial services brought in after the 2008 crash amid fears he is aiming to make London into a post-Brexit “Singapore-on-Thames” pushed by Tory donors.

The chancellor is bringing forward a new financial services and markets bill as part of the Queen’s speech with the aim of “cutting red tape in the financial sector”.

Under the changes, Sunak is planning to get rid of the EU regulatory regime covering the City of London and replace it with a UK-specific one.

The Queen’s speech insisted that “high standards” in financial services regulation will be maintained but the move stoked fears that Sunak is looking to rip up rules governing the banks, insurers, traders and others in the City in order to boost the economy.

Tory and leave donors have long been pushing for a move towards a lighter touch regulatory regime, sometimes referred to as the Singapore-on-Thames model.

Sunak earlier this year said that Brexit would lead to a “big bang 2.0” in reference to the period of financial services deregulation in the 1980s, which was later blamed for paving the way to the financial crash of 2008.

The description of the bill does not go into details about which elements of regulation will be scrapped or changed, but it does mention reform of rules around the UK’s capital markets “to promote investment”. This appears to take aim at MIFID II – tough regulations brought in by the EU after the 2008 crash to improve markets.

The government claims that removing restrictions on trading in wholesale markets will benefit about 3,200 investment firms in the UK “who are currently prevented from getting the best price for investors”.

Ministers are also looking at Solvency II regulation of the UK insurance