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UK's new financial sector minister says listening to banks ahead of Brexit

Published 27/06/2017, 13:56
© Reuters.  UK's new financial sector minister says listening to banks ahead of Brexit

By Carolyn Cohn and Huw Jones

LONDON (Reuters) - Britain's new "City minister", Stephen Barclay said he was up to the job of overseeing financial services and would listen to the sector's concerns over Britain's departure from the European Union.

In a speech to the Association of British Insurers, Barclay, whose official title is Economic Secretary to the Treasury, sought to reassure banks and insurers that he was qualified for the job.

His predecessor, Simon Kirby, was stripped of his role in overseeing the industry's preparations for Brexit after banks worried he had too little experience in finance.

"Prior to becoming an MP (member of parliament), I worked in both the insurance and banking sectors, and at the City regulator. I plan to bring that industry focus to bear in discussions within Whitehall and beyond," Barclay said.

He also sought to calm worries that government was not hearing the sector's concerns about Brexit - lenders said last year their concerns were falling on deaf ears.

"I know that my job will involve a great deal of listening to your concerns, and indeed your ideas for growth and investment," Barclay said.

"But it will also be about showing you that we’re acting on what you tell us."

Apart from securing access to the EU's single market after Brexit, banks and insurers in the UK want to continue hiring staff from outside Britain.

Barclay said the British people understand the importance of businesses being able to access global talent and to move individuals around their organisations.

"The concerns on immigration expressed during last year’s referendum were not about insurers bringing in the skills they need to keep their businesses at the cutting edge," he said.

CATASTROPHE BONDS

Barclay said Britain will be on track to become a centre for insurance-linked securities such as catastrophe bonds later this year.

Britain's insurance industry has been pushing to set up a catastrophe bond market to take on rival centres such as Bermuda, which already have regulations in place to allow the repackaging of large risks like hurricane insurance as debt instruments.

"The regulations are now being finalised so they can be laid in parliament before the summer recess, with a view to the regime coming into force in the autumn of this year," Barclay said in a letter to lobby group the London Market Group (LMG).

Catastrophe bonds other insurance-linked securities are popular investments for pension funds due to their high yield compared with traditional asset classes.

Catastrophe bond issuance totalled $5.8 billion in 2016, according to broker Aon Benfield.

"We hope this partnership with government sets a strong precedent for other initiatives and growing its share of the global market," said Malcolm Newman, chairman of the LMG's ILS taskforce.

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