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Free trade commitment would blaze a trail towards growth, says FCA boss

A commitment to f ree trade, open markets and a global standard of regulation would enable countries to blaze a trail towards stronger economic growth, according to the boss of Britain's financial regulator.

Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), has urged countries to back free trade and open markets by adopting a broader regulatory framework that provides smoother access to global markets.

In a speech at the Economic Council Financial Markets Policy Conference in Berlin, Mr Bailey said such action would be "a step in the right direction at a time when the openness of the world economy is more under threat".

Speaking in a personal capacity, he added: "We are at a very important point in terms of how we can best deploy public policies to support economic growth.

"Free trade and open markets remain in my view the best approach to secure stronger growth."

The move would bring some solace to London's powerhouse financial services sector, which is waiting with bated breath to see whether it will retain the regulatory equivalence and passporting rights needed to trade freely across the European Union (EU) following Brexit.

The EU has staunchly defended its position that firms in the City of London would lose EU passporting rights if Britain opted for a "hard Brexit" and exited the single market.

Since then, Prime Minister Theresa May has outlined in her Brexit blueprint that Britain would leave the single market and seek a " bold and ambitious free trade agreement" with the EU.

While not explicitly mentioning Brexit, Mr Bailey said any move to limit market access would be a "big mistake".

"While we have done a great deal to develop global regulatory standards in the aftermath of the crisis, we have taken very few steps towards using those stronger standards as the basis to govern market access for financial firms.

"Our approaches remain national, or in Europe, regional.

"We face evidence of pressure to, if anything, go in the other direction in terms of further limiting market access. This would be a big mistake in my view."

However, the former deputy governor of the Bank of England said global financial regulation should be underpinned by national regulators that would oversee standards "specific to local markets".

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