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Should We Fear Singapore-on-Seine?

The phrase “Singapore-on-Thames” is shorthand for Britain becoming a low-tax, lightly regulated economy that can out-compete the sclerotic, over-regulated eurozone. Yet, there is no meaningful political support in Britain for significantly lighter bank regulation – in contrast to the situation in France.

LONDON – The idea that London might have a post-Brexit future as a kind of deregulated “Singapore-on-Thames” is one of the more curious notions to have emerged in the three and a half years since the United Kingdom’s citizens voted narrowly to leave the European Union in the fateful June 2016 referendum. In fact, at least as far as the financial sector is concerned, the bigger threat to European regulatory harmony could come from France.

The phrase “Singapore-on-Thames” is shorthand for Britain becoming a low-tax, lightly regulated economy that can out-compete the sclerotic, over-regulated eurozone from a strategic position only 20 miles or so offshore. The general idea was first mooted a couple of years ago by Philip Hammond, then Britain’s chancellor of the exchequer, as a means of encouraging the EU to strike a friendly Brexit deal with the UK.

Those who know Singapore well will quickly recognize that the analogy is far from perfect. True, Singapore has low tax rates (unless you wish to import an expensive foreign car), and low levels of public spending – although the latter does not seem to be part of the plan for Singapore-on-Thames advocates.

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