The International Monetary Fund (IMF) has warned the United Kingdom that deregulation of the country’s financial system presents issues over the role of the Bank of England (BoE) in competitiveness, reported PYMNTS.
Last month, Prime Minister Boris Johnson announced the UK’s Brexit Freedoms’ legislation will be coming as the second anniversary of the UK’s withdrawal from the European Union approaches, according to a press release. He said the government initiative would include cuts of 1 billion pounds ($1.3 billion) in red tape designed to ease regulatory burdens.
Read more: UK To Replace EU Exemptions From Antitrust Law For Producers
In a 94-page assessment of the UK’s financial stability, the IMF said it expects that its strength will be further enhanced, but stresses over policies to improve the competitiveness of the UK financial system have surfaced.
Brexit’s market fragmentation is expected as costs for financial firms rise and could trim business investment in Britain, according to the IMF report.
While the UK should maintain its commitment to the highest standards of finance, the IMF wrote in the report “Similarly … financial stability should not be compromised for the objectives of competitiveness.”
The geo-political repositioning by Johnson’s government has presented a puzzle. Without depending on the EU for regulations, the UK is on a path to create its own.
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