The Chancellor of the Exchequer, Gordon Brown, and the City Minister, Ed Balls, met yesterday with members of the High-Level Group on Financial Services to discuss new measures to enhance the global competitiveness of London and the UK-based financial sector.

The group considered a number of proposals including plans to set up a new International Centre for Financial Regulation in London to carry out research and offer training on international regulation with a view to influencing global regulatory developments.

The group also highlighted the work of Lord Levene and the London Insurance Market Review Group on modernisation of the wholesale insurance market, which will report to an ‘Insurance Summit' to be held by Ed Balls in the autumn. At the meeting the Minister will report back on HMT's analysis of the sector and the potential for further reforms, which would inform the PBR 2007 process.

Speaking after the High-Level Group meeting, Gordon Brown said: "Britain is a world-leader in financial services but it must never be complacent about the challenges ahead. So today, we have taken further forward our discussions on what more business, the City and Government can do to both meet and benefit from the challenge of globalization."

Ed Balls said: "I believe that, with the measures we have taken, together with the FSA's move towards more principles-based regulation, London and the UK-based financial sector will continue to attract the best global talent and to be a world leader for innovation, asset management, global regulation and Islamic Finance.”

Recent moves to enhance the competitiveness of the market have included a reduction in the main rate of corporation tax and the simplification and modernisation of aspects of the tax rules on insurance.

The FSA recently announced its plans to move towards more principles-based regulation.

Following the review of the UK's implementation of the EU Insurance Mediation Directive, HM Treasury has consulted on plans to deregulate freight-forwarding insurance by the summer.