Britain’s post-Brexit system of financial regulation is to have a greater focus on growth and international competitiveness under new plans outlined by the chancellor, Rishi Sunak.

In what the Treasury described as a “once-in-a-generation” opportunity to reform the way one of the UK’s biggest industries is supervised and policed, Sunak said the sector would benefit from a customised regime.

The proposals would involve the scrapping of EU financial services law retained after Brexit but no longer deemed appropriate. It will be replaced by new rules drawn up by the UK’s two watchdog bodies – the Financial Conduct Authority and the Prudential Regulation Authority.

Ensuring financial stability would still be the prime goal for the FCA and the PRA, but the two bodies are now to be given the additional task of boosting growth, according to the Treasury.

Sunak believes the insistence on rules made in Brussels being followed has constrained the government’s ability to set requirements best suited to the needs of UK markets. Making regulation consistent with growth does not feature in the EU’s system of financial regulation.

Financial services were not included in the Brexit deal agreed by with the EU, and the government has been under pressure to prevent business being lost to cities such as Frankfurt, Paris and Amsterdam. The government said it recognised the need to ensure regulation supported the “future strength and viability of the UK as a global financial centre”.

The chancellor said: “Earlier in the year, I set out my vision for an open, green, and technologically advanced financial services sector that is globally competitive and acts in the interests of communities and citizens across the UK, creating jobs, supporting businesses and powering growth across the UK.

“One important part of that vision is ensuring, as an independent nation, that we have a coherent, agile and internationally-respected approach to financial services regulation that is right for the UK.

“Today’s proposals will support the future strength of the UK as a global financial centre, ensuring an agile and dynamic approach to regulation that supports the growth of the UK economy, without diverging from our continued commitment to high international standards.”