When the ambassador of the City of London’s financial services sector declares that Britain has “moved away” from aligning with European Union regulation, it is not a rhetorical flourish. It is a legal position. And it carries consequences that extend well beyond Britain’s borders.
Nearly ten years after Brexit, the remarks by Susan Langley, the newly appointed Lady Mayor of London, mark one of the clearest articulations yet of the United Kingdom’s post European Union regulatory identity. This is no longer a debate about transition, adjustment, or temporary divergence. It is an assertion of permanent regulatory sovereignty and, more importantly, of strategic non alignment in global financial governance.
From an international legal perspective, this moment matters.
Regulatory alignment is a legal commitment, not a political gesture
Regulatory alignment with the European Union is not a symbolic act. It is a binding legal choice that shapes market access, supervisory cooperation, dispute resolution and capital mobility.
For decades, the City of London operated as the EU’s principal financial gateway, benefiting from passporting rights rooted in shared legal architecture. Brexit dismantled that framework. Since then, the question has not been whether Britain could technically realign, but whether it should subordinate its regulatory autonomy to a bloc whose rules it no longer shapes.
Langley’s statement confirms that the answer, from the City’s institutional leadership, is now decisively negative.
Crucially, this is not an anti Europe position. It is a rejection of exclusive regulatory dependence. By warning against linking Britain’s financial rules to “any single jurisdiction”, London is signalling a shift towards legal pluralism rather than bloc alignment.
From European convergence to global equivalence
The legal strategy now emerging is not harmonisation but equivalence.
Under international financial law, equivalence regimes allow jurisdictions to recognise each other’s regulatory outcomes without identical rules. This approach aligns Britain more closely with the United States, Singapore, Japan and other global financial centres than with the EU’s rules based system.
However, equivalence is inherently fragile. It is discretionary, revocable and politically contingent. The European Union has already demonstrated its willingness to weaponise equivalence decisions in areas such as derivatives clearing.
By choosing this path, Britain is accepting legal uncertainty in exchange for regulatory freedom. That trade off is not accidental. It reflects a conscious recalibration of risk, favouring long term sovereignty over short term certainty.
The Rule of law as Britain’s global differentiator
Langley’s emphasis on working with countries that “share its values and respect the rule of law” is not incidental language. In international finance, the rule of law is a competitive asset.
London’s enduring appeal rests less on regulatory alignment and more on judicial credibility. English law continues to govern a vast proportion of global financial contracts. The independence of UK courts, predictability of legal outcomes and depth of commercial jurisprudence remain unmatched.
By decoupling from EU regulation while reaffirming commitment to the rule of law, Britain is attempting to reposition itself as a neutral legal hub rather than a regional financial appendage.
This distinction is critical for emerging markets and global investors navigating fragmented regulatory landscapes.
Geopolitical implications beyond Europe
The timing of Langley’s remarks, ahead of the World Economic Forum in Davos, underscores their international intent.
At a moment when global trade is increasingly shaped by strategic blocs, Britain is signalling resistance to regulatory bloc politics. This has implications for:
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Transatlantic financial cooperation with the United States
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Indo Pacific trade and investment frameworks
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Cross border capital flows involving emerging economies
In each case, regulatory autonomy allows Britain to negotiate bilaterally rather than through EU intermediaries. That flexibility may prove advantageous as financial regulation becomes entangled with national security, sanctions policy and technological competition.
The Starmer factor and the limits of political reset
Prime Minister Keir Starmer’s overtures towards Brussels have revived debate about closer UK EU cooperation. Yet Langley’s comments reveal a structural constraint on any political reset.
Regulatory realignment is not merely a diplomatic choice. It would require the UK to accept rules it no longer influences, enforced by institutions beyond its democratic control. For the City of London, that is a legal red line.
Dialogue with the EU may deepen, particularly in defence and security. But in financial regulation, the divergence appears settled.
London’s reputation and the narrative battle
Langley’s rejection of claims that London is unsafe reflects another international dimension. Perception shapes capital flows as much as regulation.
Statements by figures such as Donald Trump portraying London as crime ridden carry reputational consequences in global markets. By publicly countering such narratives, the City is defending not just civic pride but economic credibility.
For international investors, confidence in the host jurisdiction’s stability is inseparable from legal certainty and public order.
A financial centre redefining its legal identity
Britain’s move away from EU regulatory alignment is not a retreat. It is a reorientation.
The City of London is positioning itself as a globally connected, legally autonomous financial centre, anchored in the rule of law rather than regional conformity. This strategy carries risks, particularly in relation to EU market access. But it also reflects a sober assessment of Britain’s comparative advantages.
In international legal terms, the UK is no longer seeking to belong. It is seeking to arbitrate, facilitate and govern across systems.
That choice will shape not only Britain’s financial future, but the evolving architecture of global finance itself.