Treasury to keep 'open mind' about interfering in financial regulation
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The chancellor of the exchequer has said the government will not give itself further powers to question financial regulation in the upcoming financial services and markets bill but will keep “an open mind” about this.
In his Mansion House speech to City grandees last night, Nadhim Zahawi outlined the government’s priorities to help the economy grow: address inflation, help the private sector grow and introduce the financial services and markets bill today, a “landmark piece of legislation” to help the country break away from EU laws after Brexit.
“That [bill] gives us the tools we need to seize the opportunities of Brexit and create a safer, better system for consumers. The bill implements the outcomes of the Future Regulatory Framework Review,” he said.
Zahawi also said the bill gives the Financial Conduct Authority and the Prudential Regulation Authority a new, secondary objective - to facilitate growth and competitiveness - in addition to the regulators’ primary objective of financial stability and consumer protection.
By making growth and competitiveness a formal objective, the government is encouraging a greater focus on medium to longer-term productivity, he argued.
This new objective for regulators is contentious as it is seen by some to be in conflict with consumer protection and financial stability.
Zahawi said the government was taking a balanced approach: “By making growth and competitiveness a formal objective, we’re encouraging a greater focus on our medium to longer-term productivity. But, by making it secondary, we’re giving the regulators an unambiguous hierarchy of objectives, with financial stability and consumer protection prioritised.”
He added that the bill includes new measures to “increase the regulators’ accountability and relationships with government and stakeholders”.
Addressing speculations about the government taking further powers to intervene in financial regulation, he said: “That is something we’re looking at and I’m keeping an open mind.”
He clarified this will not be included in the bill, “because I want time to consider all the arguments before making such an important decision”.
How do you think the bill will affect the FCA’s rules on pensions?
In his Mansion House speech to City grandees last night, Nadhim Zahawi outlined the government’s priorities to help the economy grow: address inflation, help the private sector grow and introduce the financial services and markets bill today, a “landmark piece of legislation” to help the country break away from EU laws after Brexit.
“That [bill] gives us the tools we need to seize the opportunities of Brexit and create a safer, better system for consumers. The bill implements the outcomes of the Future Regulatory Framework Review,” he said.
Zahawi also said the bill gives the Financial Conduct Authority and the Prudential Regulation Authority a new, secondary objective - to facilitate growth and competitiveness - in addition to the regulators’ primary objective of financial stability and consumer protection.
By making growth and competitiveness a formal objective, the government is encouraging a greater focus on medium to longer-term productivity, he argued.
This new objective for regulators is contentious as it is seen by some to be in conflict with consumer protection and financial stability.
Zahawi said the government was taking a balanced approach: “By making growth and competitiveness a formal objective, we’re encouraging a greater focus on our medium to longer-term productivity. But, by making it secondary, we’re giving the regulators an unambiguous hierarchy of objectives, with financial stability and consumer protection prioritised.”
He added that the bill includes new measures to “increase the regulators’ accountability and relationships with government and stakeholders”.
Addressing speculations about the government taking further powers to intervene in financial regulation, he said: “That is something we’re looking at and I’m keeping an open mind.”
He clarified this will not be included in the bill, “because I want time to consider all the arguments before making such an important decision”.
How do you think the bill will affect the FCA’s rules on pensions?
