Lawmakers to examine post-Brexit effects on Britain's financial sector

British lawmakers launched an inquiry on Friday to determine if the country should track European Union rules or cut loose to best serve its financial sector after Brexit. Finance is Britain's biggest tax raising sector, earning government coffers more than 70 billion pounds ($91 billion) each year, and the EU is the sector's largest single customer. "London is the world's premier financial centre, and many of us want to keep it that way," Treasury Select Committee chair Nicky Morgan said in a statement.

Supporters of Brexit say departure from the EU is an opportunity to trim the rulebook and keep the City of London competitive as a global financial hub. British regulators want to stay aligned with the EU and have ruled out a "bonfire" of regulations, warning about the perils of "light touch" rules that led to the financial crisis. Britain has yet to secure a divorce settlement with the EU to avoid leaving the bloc on March 29 without any framework, leaving banks, insurers, asset managers and trading platforms in Britain with European customers scrambling to open new EU hubs.

The committee said on Friday it will look at what Britain's priorities should be when it negotiates future trading relations with the EU and other countries. The EU has said that Britain's financial sector faces the same patchy and unpredictable system of market access as other non-EU countries like the United States and Japan. Brussels grants access to foreign financial firms if their home regulation stays "equivalent" or closely aligned with the bloc's own rules, a determination that has no timetable.

Miles Celic, chief executive of TheCityUK, which promotes Britain's financial services abroad, said there is no appetite in the industry to take a bulldozer to current rules. "The UK's reputation for quality regulation and high standards is a key competitive advantage," Celic said. The committee will make recommendations to the government and regulators. ($1 = 0.7673 pounds)