Philip Hammond will lay the foundations on Thursday for an overhaul of the City’s post-Brexit regulatory landscape just weeks before he expects to be ousted by the next prime minister.
Sky News has learnt that Mr Hammond will use his annual speech at the Mansion House dinner to launch a review of the financial services industry’s future regulatory framework – delivering on a commitment he made as part of his spring statement three months ago.
Insiders said that the review, which is intended to last for several months, would be led by the Treasury but is likely to have as its figurehead an as-yet unidentified expert on the regulation of the financial services sector.
Mr Hammond’s move to launch the study will come after intense lobbying by prominent City figures who want to ensure that London’s status as one of the world’s leading financial centres is not jeopardised by continuing uncertainty about the terms of Britain’s departure from the EU.
In a written statement in March, the Treasury said its review would consult “on how to ensure our financial services regulatory framework adapts to our new constitutional position outside the European Union”.
“This includes the need to ensure financial stability is delivered through an effective regulatory framework, with the responsiveness necessary for a dynamic and open financial services sector and an appropriate level of democratic accountability,” it said.
One insider said the Mansion House speech would include little by way of additional detail, and conceded that whoever succeeds Mr Hammond as chancellor under a new Conservative Party leader could elect to water down the review.
The source said the announcement would be contained in an address that would be “valedictory in tone”.
“The chancellor will talk about his record in office, including the work he has done to keep the public finances in check during a challenging period for the country,” a City source said on Tuesday.
Mr Hammond remarked during a meeting last week with the advisory council of TheCityUK, the lobbying group, that his Mansion House speech was likely to be the final one he makes in his current role.
Sources who attended the discussions said that Mr Hammond had highlighted the need for high-quality regulation of financial services, but that it needed to be proportionate.
A Treasury spokesman declined to comment on the contents of the chancellor’s speech on Thursday.