On January 6, the governor of the Bank of England and the head of the Prudential Regulation Authority explained to the Treasury Select Committee of the UK parliament how London will prosper as a global financial centre by freeing itself from the EU’s dreadful regulatory red tape.
They reassured MPs that the UK will not be a rule taker. Oh no.
BofE governor Andrew Bailey said: “Can I give you an example, because it may help to illustrate this? There will be examples that the EU will come up with, but the EU has very recently adopted a rule that allows the value of a bank’s own capitalized software to count within its capital. That is against the Basel accord, and we are just not going to implement that rule, because it is unsound, I am afraid.
“Come the day when you need the free capital, and I emphasize the word ‘free’, I do not know how you think you get the value out of your software at that point. We are not going to do that. I am sure they will come up with something we have done that they will say does not make any sense. I cannot think what it is, obviously, because we have not done anything that does not make sense. But we are just not going to be in a situation where we take rules like that.”
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Perhaps Bailey and Sam Woods think their European counterparts don’t read the transcripts of Treasury select committees. But Euromoney’s hunch is that they just might, and we ask some of them to comment.
“I’m afraid we wouldn’t have any comment on these comments,” says a spokesperson for the European Commission, displaying an almost British sangfroid.
A spokesperson for the ECB also thanks us for the opportunity but declines. So, Euromoney zooms instead with the head of investment banking at one global firm, who we track down to his new office in Germany.
“No,” he says. “No, I can’t think of anything the UK has done recently that doesn’t make sense.”
He throws back his head.
That sound you might hear is him laughing fit to burst.
