By Huw Jones
LONDON (Reuters) - Keeping the City of London competitive should be an "across the board" objective for Britain's financial regulators after Brexit, a UK banking industry body said in a paper published on Monday.
Britain's finance ministry is consulting on future financial regulation after the UK's departure from the European Union cut the City off from the bloc's financial markets but left it free to set its own rules as it competes with New York, Singapore and, indeed, the EU.
UK Finance, which represents high street banks, said the international competitiveness of UK banking would be enhanced by more proportionate regulation.
Mindful that the Bank of England is opposed to a formal competitiveness objective which would require it to consider the ability of UK banks to compete globally, the finance ministry has suggested some activities could be subject to less red tape like burdensome reporting requirements.
"The sector is of major importance to the UK economy, and this calls for international competitiveness to be a principle to which the regulators must have regard across the board and not just in respect of specific activities," UK Finance said.
Consumers have faced a string of financial scandals, from pensions to the mis-selling of payment protection insurance, piling pressure on regulators to better protect them.
However, UK Finance took a more qualified stance, saying regulators should also remind consumers that they bear responsibility for their decisions.
Britain's regulators are funded by levies on financial firms and UK Finance said annual requirements have risen by 11.5% over the past four years to nearly 900 million pounds.
"We therefore believe there is merit in reviewing the overall cost of regulation, in particular compared to that in other major financial centres, to ensure it does not act as a disincentive for firms to do business in and from the UK," it said.
Any significant divergence from EU regulations could scupper attempts to secure an 'equivalence' ruling which would allow some UK banks and financial institutions to directly serve clients in the bloc again.
(Reporting by Huw Jones; Editing by Kirsten Donovan)