Fron t Cove r Fea t ur e 10 Finance Monthly. Despite some thawing in relations in 2022, the shadow of Brexit continues to loomover both the UK and EU and competitiveness between jurisdictions has become a key concern. In the UK, the Financial Services and Markets Bill will provide regulators with a secondary objective to consider the UK’s competitiveness. The UK government has also set out its strategy for regulationintheformoftheEdinburghreforms.Thesefocusmainlyonreform to parts of the UK system that have proven unpopular and have been badged as using Brexit freedoms. Ironically, some of the highest profile reforms are in areas, like ringfencing and the senior managers’ regime, that were not actually related to EU law. In the EU regulation aims to provide the single market with ‘open strategic autonomy’. This nebulous label intends to boost the efficiency of the single market and the competitiveness of EU firms while not relying on ‘third countries’ such as the UK. The EU is looking to make tangible progress on its Capital Markets Union agenda, and tech and data will be important features in the regulatory work of the EU in 2023. A regulatory focus on competitiveness might sound attractive, but memories remain of the financial crisis, before which competitiveness was a regulatory objective, so there may be reluctance to embrace it. Also, regulators do not have a great record of promoting innovation and datadriven change in Europe, so a close eye will need to be kept on this. COMPETITIVENESS “The shadow of Brexit continues to loom over both the UK and EU and competitiveness between jurisdictions has become a key concern.”
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