Financial Services policy briefing: May

The Financial Services team continues to work actively on the range of consultations on the future of UK financial services, the latest being the climate-related financial disclosures and the implementation of Basel III standards. Work with members continues apace with the Sustainable Finance Working Group finalising B7 policy recommendations and the Innovation Forum reconvening later this month.

Consultations

In early May, we finalised the responses to BEIS’ consultation on climate-related financial disclosures and the Bank of England’s consultation on the implementation of Basel III standards.

Climate-related financial disclosures

We supported the government’s proposal to introduce mandatory TCFD-aligned financial disclosures. However, we highlighted that the legislative approach needs to be accompanied by more detailed practical implementation guidelines, as well as good communication on best-practices and planned regulatory reviews as standards, tools, and methodologies are being developed. We underlined the need for coordination between the government, regulators and international standard-setters, to make sure that there are no discrepancies between different workstreams.

The implementation of Basel III Standards

In the CBI’s response, we highlighted that an effective prudential requirements regime for banks will play a critical role in strengthening the UK’s position as a leading global financial centre, as well as unlocking vital growth and investment across the whole economy. We stressed that any changes to prudential requirements should consider the impact on the flow of finance across the whole economy and why the inclusion of the SME supporting factor will be vital. This is epecially true at a time where there is growing demand for finance amongst SMEs looking to build back from the coronavirus pandemic. Implementation of the Basel standards should be a key part of a proportionate and agile regulatory framework that safeguards stability whilst supporting economic growth, retaining the UK’s position as a leading global financial centre.

Sustainable Finance Working Group

Over the past month, the working group focused on finalising the B7 policy recommendations to G7 Climate Ministers on sustainable finance. Now, we are moving on to define the CBI’s short-term and long-term policy priorities for the months to come. Our goal is to publish a policy paper with our positions and recommendations on sustainable finance ahead of COP26.

The next working group meeting will take place on May 25 at 15:00-16:00, and it will be our first brainstorming session on what policy issues we should focus on, what our key policy goals should be, and how to effectively structure our work together. If you would like to be involved, please contact Julia Jasinska.  

Financial Services Innovation Forum

After a hiatus due to COVID-19, the CBI’s Innovation Forum will reconvene for its next meeting on Thursday 27 May 2021 from 14:30-16.00.

The session will focus on the recent publication of the Kalifa Review, what steps the government are taking to implement its recommendations and what role the business community can play in making the roadmap a reality.

If you would like to attend the session, please contact Megan Coulson.