UK can diverge further from EU financial rules, says new Lord Mayor of London

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By Tommy Reggiori Wilkes and Sinead Cruise

LONDON (Reuters) – Britain has room to ease more financial rules away from the EU to boost competitiveness, the new City of London chief told Reuters, saying the UK can appeal as an alternative to the United States under Donald Trump.

Alastair King, who started this month as the new ceremonial head of the City of London, said he was talking to the British government about how the UK could diverge from European Union rules.

“There are some opportunities there,” he said. “We want to have our own areas where we can we have a competitive advantage, but also we want to keep on very good terms with the EU,” he added in an interview with Reuters last week. He declined to be specific while sharing his views with the government about which areas of regulation are ripe for reforming.

UK finance minister Rachel Reeves this month promised a reboot of regulation governing financial services, saying it had shackled the City’s prospects.

Reeves’ predecessor and Bank of England officials have already flexed some post-Brexit freedoms to tailor rules. Recent tweaks to Basel global bank capital regulation and proposals to slash deferral periods on bonus payouts have also been seen as signs of increased ambition to diverge from the EU.

Any easing would come as leaders brace for a possible bonfire of regulation on Wall Street during Trump’s second term in office.

King, an asset manager who will serve as figurehead for the UK financial and professional services industry over the next 12 months, said Trump’s re-election offered opportunities for London too.

“We have this extraordinary international reach which gives us an exceptional advantage. Remember that old expression, if you want to meet Americans, go to New York. If you want to meet the world, come to London. I think that still holds,” he said.

King, however, said the City lacked confidence after the vagaries of Brexit, COVID-19, political instability and the 2008-9 financial crisis hangover.

His predecessor told Reuters that Brexit had been a disaster and cost London 40,000 finance jobs.

Bankers had stopped “getting on planes and banging the doors” of top international business prospects – a knack they needed again to expand ties with fast-growing economies outside the EU, King said.

The Lord Mayor is this month visiting the Gulf for the first of at least four delegations to the region during his term, while selling London to fast-growing Asian countries is also a priority, he said.

At home, King wants UK pension funds to put more money into Britain’s struggling stock market by broadening the ‘Mansion House Compact’ – a voluntary agreement introduced by the former Conservative government last year under which big pension funds committed to invest more in unlisted UK companies – alongside encouraging retail savings held in cash into shares.