Brexit: will we really be free from the clutches of EU regulation?
The decision on 23rd June marked a paradigm shift for British politics, and it will have a profound impact on many areas of people's lives, not least the financial decisions they make.
The dust may be settling over the typical summer lull, but until the details of our departure are painstakingly negotiated, there will be many periods of general uncertainty and market volatility - two things that are not good for our personal finances.
It is probably a very wise idea to focus wholeheartedly on the benefits we can derive from the Brexit decision, and view our new relationship with the EU as an opportunity that should be made the most of. One false dawn for financial services though, is to think that we could be free from the regulations that many perceive as stifling. I.e. that Brexit spells the end of "red tape".
There are several areas where this currently impacts on people's ability to get mortgages. A key one is that the new wave of challenger banks find it hard to offer mortgages as competitively as the more established high street banks, because regulations require them to hold more money in reserve as a safety net. However, whilst it is European regulations and directives that require us to implement much of this, in many instances it is the UK government that has shown the path forward for best practice in financial services. Where we have blazed a trail, the EU leviathan follows closely behind. This is certainly true with regard to the process for selling mortgages, and also the way we provide financial advice.
The UK regulator has already made it clear that there will be no "bonfire of regulation", and on this broader point they are entirely right. In order that we can keep our economy strong, we must be able to keep the economic links with our European counterparts and that means our products and services are up to a common standard, and that our rules are equivalent. If we deregulate, we deviate and that could ultimately be shooting ourselves in the foot.
The temptation, now we have decided to leave the EU, is to move apace with forging a separate path. But in order to make a success of this for ordinary people, by growing our economy and allowing people to prosper, perhaps some of the status quo might just be what's needed.
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