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Global regulation needed to ensure recovery of financial services

The Financial Services Global Competitiveness Group says a global approach to regulation is needed to ensure the recovery of the financial services sector.

The Group which is co-chaired by Chancellor Alistair Darling and former Citi Group chairman Sir Win Bischoff published a report today which proposed a ten to 15 year framework to strengthen the UK’s financial services industry.

The report states that the UK’s financial services sector can continue to be a world leader by working “as a genuine partner of British business and emerging
economies”, while embracing the need for global regulatory reform.

Speaking at the launch of the report, Bischoff said: “International financial services are not a zero sum game: progress in one country need not come at the expense of another. It is strongly in the UK’s interest to build on its existing relationships with capital markets around the world, especially in the emerging economies.”

City Minister Lord Myners said: “Now good regulation is what we need and it must be proportionate and effective. It must not be so over-regulated that it extinguishes the spark of innovation. Companies do not fail because of poor regulation on the whole. They fail due to their strategy and the individual decisions that they make. Regulation does not exist to ensure zero failure of institutions.”

Association of British Insurers director of regulation Peter Vipond says: “The report also recognises that regulators must not read across from issues in banking to other sections of the financial services sector, and regulation must not inhibit the ability of firms to offer competitive products for consumers. As the report says, we need ‘responsible financial innovation with effective oversight’.

“The goal of closer working by Government and industry to ensure more stable and effective systems of tax and regulation must be made a reality as soon as possible.

This is something the insurance industry has long asked for, and already started, including meetings with the Chancellor.”

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