Consumers and savers will benefit, while the “boot on the neck of businesses” will be lifted, under widespread reform of financial services regulation announced by Chancellor Rachel Reeves.
In her Mansion House speech in the City of London Ms Reeves said regulation is “choking off the enterprise and innovation that is the lifeblood of growth”.
She told a gathering of financial services leaders that she will reform the Financial Ombudsman Service to speed up redress as well improve the regulation of the insurance and asset management sectors.
There will be new measures to support scaling-up of fintech businesses, and a concierge service to assist those overseas companies wanting to invest in the UK.
In a slight rolling back of the rules on banks brought in after the 2008-09 crash, she will lower their capital requirements and ease the ringfencing that separated corporate and retail customers.
Ms Reeves said the Labour government has been bold in regulating for growth in financial services which will have a “ripple effect” of benefits across all sectors of the economy.
She earlier announced measures to ease access to mortgages with a higher loan-to -income ratio, and better returns on savings through measures such as forcing banks to provide investment opportunities to savers. She confirmed that “further changes” may be made to individual savings accounts (ISAs).
“As I look ahead it is clear that we must do more,” said. “In too many areas, regulation still acts as a boot on the neck of businesses, choking off the enterprise and innovation that is the lifeblood of growth.
“Regulators in other sectors must take up the call I make this evening, not to bend to the temptation of excessive caution but to boldly regulate for growth in the service of prosperity across our country.”
Earlier the Financial Conduct Authority announced various moves to stimulate the UK stock market which were accompanied by the FTSE 100 breaking through the 9000 barrier for the first time.
The IPO process will be sped up in an effort to convince more companies to list in London. Existing quoted companies won’t have to publish detailed documents to raise more money, in most cases. The process of issuing corporate bonds to retail investors will also be simplified.
Jason Windsor, Aberdeen Group CEO, said: “Aberdeen and interactive investor have long highlighted the benefits of saving and investing for UK individuals and institutions, so we are pleased to see the government laying the foundations to help build a healthy culture of investing here in the UK.
“The government’s strategy draws from Aberdeen research which showed that UK adults hold only 8% of their wealth in investments, the lowest of any G7 country.
“That’s why it is so important to create sustained public awareness, backed by Government, and with financial education at its heart. As more people are encouraged to invest, our job is to make it simple and easy for them to access the information and services that they need to do so with confidence.”
Rain Newton-Smith, chief executive at the CBI, said the reforms “mark a vital step forward for the UK economy.”
She said they recognise that the financial services sector is not merely a key industry in itself, but a foundation for growth and prosperity across every region and nation of the UK.
“When financial services thrive, so does the entire economy – creating jobs, fostering innovation, and driving investment in communities nationwide.”
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