The push to remove the US Dodd-Frank regulations should not cause the City to panic, instead it should be seen as a catalyst for the UK to follow and in turn help financial services firms reduce their regulatory burden.
Yesterday, US president Donald Trump signed off on one of the biggest changes to US financial services regulations since the global financial crisis to ease rules on all but the largest banks and lift burdens that some feel unnecessarily put on small and medium-sized lenders by the Dodd-Frank financial reform act and boost economic growth.
Some opponents, have argued that the changes could open US taxpayers to more liability if the financial system collapses.
Mark Turner, managing director of Compliance and Regulatory Consulting at Duff & Phelps urged the City not to panic pointing that regulation should “not be ever increasing without check and challenge”, and should reflect the changing world.
“Terminating poorly thought out regulation that could be seen to choke business growth is not the same as allowing a free-for-all that will derail markets,” said Turner.
“The UK has a strong framework of principles based regulation that supports competition, protects customers and takes firm action against wrongdoing by firms and individuals – it is by no means perfect, but we are looked upon as global leaders in this space.”
“Any changes made in the US won’t alter the UK’s reputation as a safe and sound place to do business, and a knee-jerk reaction, or race to the bottom is not the right answer.”
Turner added that the changes highlight the need for the UK government to restore trust in UK plc, including getting to the root cause of failures and changing regulations to ensure “robust structures” are in place to protect customers and businesses.