Business

The new UK Prime Minister may have big plans for the City of London


Everyone in the UK’s financial sector is wondering if the new prime minister will change the regulatory landscape.

Jeff J Mitchell / Staff / Getty Images

As Liz Truss becomes Britain’s new prime minister on Tuesday, questions are being raised about her plans for the UK’s historic financial district – the City of London – as the country faces The cost of living crisis is getting worse and ongoing conflict in Ukraine.

City managers may face a major change under Truss, follow to the Financial Times last month. It cited campaigners as saying Truss would seek to review and possibly unify London’s three major regulators – the Financial Conduct Authority (FCA), the Prudential Regulatory Authority (PRA) and the Financial Conduct Authority (PRA). Payment Services Regulatory Authority (PSR).

She also requested authorization from the Bank of England It will be considered during her time as prime minister.

‘Change for the sake of change’

The FCA regulates 50,000 companies in the UK to “ensure that our financial markets are honest, competitive and fair”, according to its website. Meanwhile, the PRA oversees the operations of about 1,500 financial institutions, to “ensure that the financial services and products we all rely on can be delivered in a safe and sound manner. “

Their monies may sound similar, but the different organizations formed when the Financial Services Authority decided, the City regulator from 2001 to 2013, had a variety of functions that could be better served through separate organizations.

According to Matthew Nunan, partner at the legal firm Gibson Dunn and former division head at FCA, the agency’s primary goals were initially good conduct and financial soundness across the industry. He says dividing it into two is seen as a way to give those goals equal priority.

“The simple question that needs to be answered now is: What will be the outcome of rejoining the PRA and FCA?” Nunan wrote in an email to CNBC.

“If the answer is a reshuffle of the old Financial Services Authority, what is the question? Or is it simply change for the sake of change?”

Governments should always “challenge the status quo”, Nunan said, but said the issue was whether this would actually better serve “a country’s changing needs”.

“The point here is that instead of stating an issue and looking for evidence, statements are made that seem to suggest answers to questions no one is asking,” he said.

Nunan also emphasized the difference between managers and politicians, saying that managers would “never be allowed” to make proposals the way Truss has.

“Regulators are required by law to make evidence-based decisions about rule changes [and] require cost-benefit analyzes before they can be implemented… If that’s true for managers, why shouldn’t it be true for politicians? ‘ he asked.

‘Light touch throttle mode’

Fran Boait, director of the Positive Money campaign team, told CNBC on CNBC’s “Squawk Box Europe” last month that the “fight” for deregulation in the banking sector was like “turning back the clock back in time.” global financial crisis before 2008”.

The campaign group said the conversation about deregulation in the UK's financial sector was 'very disturbing.

Boait says it risks leaving the country in a similar situation “or a lot worse”.

“Liz Truss’ proposal to merge the city’s three main watchdogs would risk recreating that light-touch regulatory regime – the one we had before the collapse,” she said.

She also emphasized that it has been less than a decade since the organization was originally founded.

“Not long ago, we established a much larger regulatory system because there was a consensus that there was a lot of risk in the system, [that] complexity in the financial sector needs to be properly regulated,” she said.

‘Lack of clarity’

Talks of considering or merging any London regulator remain speculative, as Truss has yet to make any official statement on the subject.

According to Hargreaves Lansdown Analyst Susannah Streeter, that causes a “lack of clarity” on the future status of the three regulators.

She said that improving financial services for customers should be at the forefront of any discussion of regulation.

“Whether they stay as single entities or as amalgamation, it’s really important that the UK has dynamic regulators that make the most of Brexit freedoms,” Streeter said. in an email to CNBC.

She added, addressing scams, creating opportunities for investors to invest in IPOs, and addressing how information is disclosed to potential investors.



Source link

news7f

News7F: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button