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City of London calls for post-Brexit banking rules that aid competitiveness

LONDON (Reuters) - London’s financial district has called for a UK regulatory regime that does not harm competitiveness, responding to bankers’ fears that being outside the European Union will reduce the capital’s clout in global markets.

A general view is seen of the London skyline from Canary Wharf in London, Britain, October 19, 2016. REUTERS/Hannah McKay

The City of London’s Lord Mayor, Jeffrey Mountevans, will tell regulators at a dinner on Wednesday evening that after Britain’s vote in June to leave the EU, “realistic, collaborative” regulation is needed to keep the sector on an even keel.

“Regulation that will continue to protect our competitiveness and provide liberal market influence across the EU, even after Brexit,” Mountevans said in remarks released to the media in advance of the annual Mansion House dinner for bankers and regulators.

The City is crying out for a consistent and forward-looking Brexit strategy that has a “bold, bright, buccaneering vision of the future”, Mountevans will say.

Some will see this as harking back to a discredited past.

This week the City marks 30 years since the day of the “Big Bang” deregulation of London’s financial markets that helped to propel London to the top of the league table of global financial centers.

The financial crisis of 2007-09 then forced taxpayers to bail out undercapitalized and poorly supervised lenders, tarnishing the “light touch” regulatory approach and ushering in a welter of tougher rules.

But since the Brexit vote, Paris, Frankfurt, Luxembourg and Dublin have vied to win a slice of the City’s financial pie should banks and other companies move operations to other countries to maintain full access to EU markets.

Backers of Brexit have also voiced hopes for an end to EU rules such as caps on banker bonuses.

But Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), who is also due to speak at the Mansion House dinner, has scotched talk of a post-Brexit bonfire of the regulations.

At a launch of the FCA’s public consultation on a new “mission” statement on Wednesday, Bailey said he would not support making competitiveness an objective.

“The thing that we can contribute to competitiveness is sound regulation,” Bailey told reporters. “It’s not appropriate, in my view, to have a competitiveness objective.”

Editing by Greg Mahlich and David Goodman