How is Britain using Brexit to change the way money is handled?

IS THIS BIG BANG 2.0?

Not exactly, but it is a change in the way rules are made. For years, regulations have been tightening consumer protections and raising bank capital requirements. Now, regulators are starting to think about what changes need to be made to make rules work better for Britain after Brexit.

The changes were first talked about as a "Big Bang 2.0" on the same scale as the big changes to share trading in the 1980s. They are now called the "Edinburgh Reforms" after the city where the finance minister, Jeremy Hunt, made them official.

The government has toned down its rhetoric, but it still says there won't be a "race to the bottom," a big break from international standards, or the end of investor protections. Instead, regulators should help the international competitiveness of the financial sector.

Hunt said that it wouldn't be right to call the reforms a "Big Bang" because we can't "unlearn" lessons from the 2008 global financial crisis. He also stressed that regulators need to be free to make their own decisions.

"Deregulation is not what the City wants. Alasdair Haynes, CEO of the Aquis stock exchange, said, "Today's announcements show that change is coming, but not in a revolutionary way."

WHAT'S RING-FENCING ALL ABOUT?

Britain has already said that it will change the rules about capital for insurers. Now, it is turning to banks.

Since January 2019, banks have had to put a cushion of capital around their deposit-taking arms to protect them from blow-ups in their more risky activities.

Banks have said that the rules are too strict and make it harder for smaller lenders to compete with larger ones in the mortgage market. The government said it will change the rules based on what it learned from a review it paid for.

Midway through 2023, the government will hold a consultation on whether to exempt banks that don't do a lot of investment banking from the rules and whether to raise the amount of deposits that must be made before banks have to follow ringfencing rules from 25 billion pounds to 35 billion pounds.

ARE BANKERS NOW OFF THE HOOK?

It's not back to the "light touch" of before the financial crisis.

The government had already said that it would get rid of an EU limit on bankers' bonuses, but other limits on how bonuses are paid are likely to stay in place.

After the global financial crisis, when taxpayers bailed out banks, few people were punished for wrongdoing that led to it. In 2016, Britain made senior bankers and senior insurance officials directly responsible for the decisions they make. In 2018, senior officials at insurance companies were added to this list.

People worried that it could be used to shame bankers in public by putting their "heads on sticks," but so far there haven't been many investigations or cases where it's been used. Bankers say that it takes too long for regulators to give the go-ahead for high-level appointments.

The government will look at this system of senior managers and certifications in the first quarter of 2023, but they haven't said how big any changes might be.

HOW ABOUT THE MARKETS?

As London tries to catch up to New York in listings, there will be a lot of reviews.

Rules about short-selling, which are bets that the price of a stock will go down, are one of the things that are being looked at. The government wants to get rid of an investor guide called "PRIIPs" that was created by the EU and replace it with a new framework.

A group from the industry will look at the case for cutting the time it takes to settle a stock trade in half, from two working days to one. This is something that is already planned in the U.S.

The rules for securitization and the prospectuses that companies give to investors when they list on an exchange will be changed.

The government says it will set up rules for a "consolidated tape" by 2024 so that investors can compare prices across trading platforms to find the best deals.

The government will act on the results of a review that looked at how listed companies can get more money from investors.

There will be a review of EU rules that require brokers to break down fees for doing research on stocks and putting in orders for those stocks. This is called "unbundling," and the EU has already partially reversed this rule. There will also be tests of a wholesale market venue that works on an on-and-off basis to make it easier for companies to get money before they go public.