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UK to ease financial regulations in post-Brexit shakeup

LONDON (AP) — Britain is easing banking rules introduced after the 2008 global financial crisis in a bid to attract investment and secure London’s status as Europe’s top financial center.

Treasury chief Jeremy Hunt said Friday that the changes, which remain Exit of Great Britain from the European Union by 2020, it will make the UK “one of the most open, dynamic and competitive financial services centers in the world”.

The package of more than 30 changes includes lifting a cap on bankers’ bonuses and easing capital requirements for smaller lenders. The government also said it will review regulations that hold bankers accountable for their decisions and relax “cap” rules intended to separate venture investment banking from retail operations.

Hunt said the government was using “Brexit freedoms” to make Britain more competitive. But many economists point out that the UK’s departure from the EU has erected barriers to trade and led some companies to move offices and jobs to other European cities.

Last year, Amsterdam overtook London as Europe’s largest equity trading center, although London remains the largest financial services center overall.

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The Conservative government says the rule changes will create a “smarter regulatory framework”. But critics say they could reintroduce the kind of risk that led to the 2008 crisis. The British government at the time was forced to spend billions in taxpayers’ money to save some banks from collapse.

Opposition Liberal Democrat Treasury spokeswoman Sarah Olney said it was “completely deaf that this government is raising taxes for working families, while cutting taxes and raising bonuses for banks.”

“Our financial services need good, smart regulation, not more promises of red tape reduction or a race to the bottom,” he said.

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