- BoE says independent regulators keep City competitive
- Says alignment with global norms key to City's future
- City of London says not calling for bonfire of regulation
- Says more urgency needed from regulators
- Kwarteng says existing regulatory set up to remain
LONDON, Sept 27 (Reuters) - The Bank of England's new objective of helping the financial sector remain globally competitive should not encourage risky bets on regulatory standards to win business, BoE executive director Victoria Saporta said on Tuesday.
Britain wants a "Big Bang 2.0" - a reference to deregulation of the stock market in the 1980s which strengthened the financial sector's global reach - to bolster the City of London following Brexit.
A draft law before parliament setting out many regulatory changes also gives the BoE and Financial Conduct Authority a new secondary objective of aiding the economy and financial sector's global competitiveness and growth.
Saporta said the best way to maintain competitiveness is by having a regulatory regime that is open, predictable, transparent and aligned with international standards.
"One thing I want to make clear is that I don't believe regulators should engage in risky compromises such as regulatory races to the bottom to win business," Saporta told a City & Financial conference.
Britain's finance minister Kwasi Kwarteng is due next month to outline what he has called an ambitious deregulatory agenda by tearing up some of the financial rules inherited from the EU, starting last week with scrapping the cap on banker bonuses, and which will include easing capital rules for insurers.
Kwarteng told a meeting with asset managers and insurers on Tuesday that "Big Bang 2.0" next month was a top priority to get the City back to being the world's foremost financial centre to drive growth.
He said he would "sort out" insurance capital rules, whose easing has faced resistance from the BoE, but reaffirmed existing regulatory structures and their independence.
New Prime Minister Liz Truss had said she would review UK financial regulators, sparking talk of a merger.
NO BONFIRE OF REGULATIONS
Saporta said alignment with international standards makes it easier for international firms to conduct business in the United Kingdom.
"It avoids inefficiencies that would arise from international firms having to comply with a different set of rules when they operate here," she said.
Financial centres are more competitive when their regulators have a good reputation for being independent, Saporta said.
But Nicholas Lyons, chair of savings group Phoenix, and Lord Mayor of the City of London from November, said the City was not looking for a bonfire of regulations, but it has been like a "dog with its tail between its legs" since the global financial crisis.
"We have this phenomenal opportunity now where we have an administration focused on releasing the capacity of the City, we actually have an opposition party fully behind the need to grow and invest, we have a regulator that is resistant to some of the urgency we feel that is necessary...but I think we will get there," Lyons said.
Nick Collier, the City of London's representative in Brussels, said 'rhetoric' about Brexit dividends, deregulation and a Big Bang 2.0 means the City won't get access to the EU financial market in the forseeable future.
"But in Brussels... they are quite nervous about what the UK is doing. If we get it right, we should be a very vibrant and deep capital market," Collier said.
Conor Lawlor, managing director at UK Finance, which represents UK banks, said it was important to make the most of the appetite for reform, as it won't be around forever.
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