The Governor of the Bank of England has a key leadership role in the UK financial system, so it's important to understand his vision for Britain's new role in the wider world. Hence my interest in his strange speech on the "future of financial services".
In keeping with his political masters' devotion to nostalgic sense of entltlement he harks back to events just after the second world war and a commitment to an 'open world economy'. He points "with pride" to the fact that the Bank of England chairs two of the four main standard setting bodies of the international financial system – the Basel Committee for banks, IOSCO for markets, the IAIS for insurance, and the CPMI for payment and markets infrastructure. It is in this context that he launches a veiled attack on the EU for failing to grant equivalence to regulation in various UK financial sectors, despite the UK leaving the trade bloc. He suggests that Britain does not participate in forming global regulation to water it down, while his political masters intend exactly that. He points, ironically, to the City's "long history" of openness while failing to acknowledge that this was predicated on EU membership, and the protection that afforded London as a home for European financial markets, while only days later Amsterdam's share trading volumes exceeded London's. He whines about lack of equivalence findings from the EU, yet merely promises that "The UK’s financial markets and its financial system are therefore open for trade to all who will abide by our laws and act consistent with our public policy objectives." He then complains about the UK being a 'rule-taker'!
The very simple rejoinder to all this is that Britain is right to acknowledge that it must work with others to change the international rules before it can change its own. But it only has itself to blame for making that task harder by leaving the EU and losing influence over the shape of EU trade rules.
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