22 June 2009

IFSL Response to the Turner Review and the FSA Discussion Paper

The response outlines key priorities of UK-based financial services businesses and calls for greater regulatory convergence

International Financial Services London (IFSL), the independent organisation promoting UK financial services worldwide, has submitted its comments to the Turner Review and the Financial Services Authority (FSA) Discussion Paper “A Regulatory Response to the Global Banking Crisis”.

Speaking on behalf of the international interests of its members, IFSL advocates a regulatory regime that is coordinated globally to facilitate convergence and competition in global markets and enable the United Kingdom to remain a leading international financial centre.

In particular, IFSL has outlined the following key priorities for reform of financial regulation at national, EU and global level:

· More convergence of regulatory and supervisory regimes – Greater international regulatory convergence would facilitate growth of business between markets and reduce obstacles to market access for international businesses.

· Market structures that promote competition and openness – Market structures should aim to foster a maximum degree of dialogue with international counterparts. EU regulation should provide a firm base for EU-based businesses to operate in a global market.

· Regulation that blends control with scope for innovation - Regulation should be ‘pro-competitive’ and ‘pro-innovative’, allowing for market governance that facilitates growth and flexibility to create financial instruments needed to respond to future global socio-economic challenges.

· Dialogue and transparency between regulators and practitioners – It is important for international, EU and national regulatory regimes to be institutionally transparent, indicating where regulatory and supervisory responsibilities lie.

· EU developments to contribute to the integrity of the European Single Market – Regulatory change within the EU should work towards sustaining the Single Market and encouraging internationally mobile financial services businesses to stay in the EU rather than migrate to alternative centres. The UK should become actively involved in the new EU organisations such as the European Systemic Risk Board and the new European System of Financial Supervisors, so that their work reflects UK views and priorities.

· European recognition that the UK market is strategic to the EU – It is vital for EU regulation to recognise the important contribution that the UK’s large, successful and highly diversified international financial services sector makes to the EU as a whole.

· Easier market access and growth in international trade – Commitment to a multilateral approach to international market opening for trade in financial services in the WTO framework remains important. The quality of the European Single Market as a bargaining chip in trade negotiations should also be preserved.

Sir Stephen Wright, Chief Executive, International Financial Services London, said: “IFSL is grateful for the opportunity to reflect the standpoint of the UK-based financial services. Our members strongly believe that it is vital that financial regulation and supervision in the UK, the EU and internationally should enable UK-based businesses to continue to compete and succeed as global markets recover in the future.

IFSL has further answered selected questions in the FSA Discussion Paper that have a particular bearing on IFSL’s member businesses and their international operations. Detailed answers can be accessed in the full response submission, see
here

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