Alright, let’s dive headfirst into this whirlwind of finance and chaos. So, here we go: London, post-Brexit, trying to keep its crown shiny, but oh boy, have they got amnesia or what? 2008 gave us a kick in the pants about loose rules and big risks, but here we are, considering dropping the guard again. Treasury’s playing with a wild idea: let’s make life simpler for private equity and hedge funds, cut ‘em some slack, and maybe, just maybe, we’ll get a growth boost. Seems like they’re betting the house on it without much to back it up. Logic, who’s she?
Rachel Reeves? She’s all in for growing the financial beast, thinks it’ll rain gold and prosperity. The chancellor’s also on about regulations going overboard. Back after the crash, the EU tightened the leash on those shadowy investment funds. Couldn’t keep track of their sneaky leverage games before, a real twilight zone situation.
EU’s was like, hey, funds with €100m or more? Time to face the music with some solid reporting and enough capital to take a few punches. Now, Britain’s thinking of jacking that bar up to £5bn! Seriously? That’s letting so many funds off the hook. And who’s gonna play bouncer? The Financial Conduct Authority. Hmmm, feelin’ uneasy?
Reeves is urging FCA to wave their pom-poms for risk-takin’, and yay for cutting through the red tape! But isn’t that creeping close to recklessness? The private equity and hedge fund world was kinda chill back in ‘08, but now, it’s monster-sized! Borrowing from shadow banks? Cool move, minus the fact those aren’t locked under the same rules as typical banks. Talk about dodging responsibility. The alarm’s been rung by the big cheese, Bank of England, this year, raising eyebrows over the shenanigans. More rules should be on the menu, not a deregulation buffet.
If FCA goes soft, fund managers will throw a confetti party. They’ve been crying for relaxed controls since 2010. Not surprising, the UK wasn’t keen on those rules at first either. Protecting the City, they say, our golden goose. The whole “Singapore on Thames” vibe post-Brexit, heads nodding everywhere. These fund managers? Best buddies with the politicians, donated big bucks for the leave campaign. Money talks, right?
Treasury thinks if City doesn’t get its asking price, fund managers might pack up for Luxembourg or some tax-friendly haven. Loads of reasons to not let finance run wild. Turns out, a fat financial sector can slow growth and productivity. University of Sheffield crunched the numbers—UK missed out on roughly three years of average GDP growth ‘cause of that financial bloat between ’95 and ’15. Maybe peeling back regulations helps fund managers, but let’s be real, who else is winning here?
