I have always been against the pursuit of equivalence – a technical term for mutual recognition of the adequacy of our respective regulatory regimes – so that our financial services industry can trade transparently across the EU. To seek equivalence is to waste a competitive advantage. Our financial services industry is in a different league from that of the EU. They want to have a part of our pie by denying us the equivalence. Well, let’s see how it goes for them.

We have a huge head start.

London is the second largest center in the world. Frankfurt is seventh and Paris does not even make the top 20. The idea that excluding us from the EU will bring lasting benefits to Frankfurt or Paris is absurd.

Freed from the search for equivalence, our regulatory and financial framework must now be considerably simplified.

Taxes and other charges on the City must be reduced.

I was delighted to see the government indicate that it would drop MIFID II (an EU offer to regulate financial markets and standardize practices across the bloc) and remove onerous listing requirements on the London Stock Exchange. .

But there is still a long way to go to promote London and, at the same time, harm the EU’s financial services sector.

Yes, harming the EU should be a political goal. International trade is competitive.

The EU has refused to welcome us to its markets and therefore we have to attack and gain their market share.

There are a number of quick and easy wins. Many of them relate in one way or another to capital adequacy ratios. These are the sums of money that banks and institutions must hold to support their lending and other activities.

To date, these regulations have falsely favored the EU (what a surprise).

Under current regulations, all EU public debts are treated as zero risk. German public debt is considered risk-free. The same goes for Greece’s debt (!). As a result, no capital is required to set aside by lenders when loans are granted to them.

We of course know that they are anything but risk free.

All EU governments and institutions are heavily in debt and, by all reasonable measures, many are bankrupt.

Lending to them should require large buffers of equity. This would result in sharp increases in their cost of capital.

There are also many European institutions operating in London as branches. In doing so, they avoid being capitalized separately and largely bypass our regulatory net.

This practice must stop.

Any EU institution wishing to trade in the UK should be required to be incorporated there, provide full capital buffers to the UK and be fully subject to UK regulation.

Here again, this would have the effect of increasing their cost of financing and pushing companies towards British institutions.

At the same time, capital adequacy ratios for clearly better risk loans, such as UK government and UK companies, are expected to be reduced. This would reduce the cost of capital for UK plc – the benefits would be immediate and substantial.

The other area of ​​adjustment is taxation. While it might annoy those of us who don’t work in financial services, the City’s taxes should be reduced.

It was disappointing to see the Chancellor championing a minimum global corporate tax rate of 15%.

Brexit was an opportunity to ease the tax burden on the private sector, but it tries, at least, to get our banks out of this minimum rate. He must insist on it. Lower taxes in the UK will draw global financial services to our shores.

And to put the icing on the cake, there is one more move we should be making.

This decision would force the bankers of Frankfurt and Paris to pack their bags for London. That’s it: remove the EU-inspired cap on bankers’ bonuses.

There is nothing like personal enrichment motivation to spur growth. While we may hate making bankers rich, now is the time to do it.

Give them the tools to make money and pay themselves. The rest would be done automatically.

It is time to lead the fight towards the EU. Make them regret the day they let the City give them the leash.


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