Truss backs power to override financial watchdogs, says FT

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LONDON — Liz Truss, the favorite to become Britain’s next prime minister, will give ministers the power to override financial regulators if they delay post-Brexit reforms, the Financial Times reported on Wednesday.

Britain’s departure from the European Union allows it to write its own rules for the City of London, one of the world’s largest financial centers but now largely excluded from the EU and facing competition from Paris, Amsterdam and Frankfurt.

The government last month unveiled a bill to reform financial rules, including relaxing capital rules for insurers known as Solvency II, inherited from the EU.

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But Finance Minister Nadhim Zahawi shelved a proposal that would allow the Finance Ministry to “appeal” or override a regulator, saying he wanted more time to consider arguments.

The FT said Truss would “definitely” pursue the insertion of the power of appeal into the bill which is currently going through parliament and is due for final approval in 2023.

Truss’ team did not respond to a request for comment.

Insurers say the Bank of England is too conservative in its plans to free up capital to invest in infrastructure, a view rejected by the Bank, which says there is also a need to protect policyholders.

BoE Governor Andrew Bailey has warned that independent regulators are central to Britain’s position as an international financial centre.

The new Financial Services Bill already includes a new objective for regulators to keep UK finance internationally competitive.

Truss also said she wanted to take a look at the BoE’s mandate to contain inflation, which is expected to hit 13% later this year as the BoE raises interest rates.

(Reporting by Huw Jones; Editing by Kate Holton)


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