By Kirstin Ridley
LONDON (Reuters) – Britain’s government should set out what failures would be acceptable if regulations are eased in the push for economic growth, the bosses of the Financial Conduct Authority said on Wednesday.
Prime Minister Keir Starmer, under pressure to reignite the economy after years of sluggish output, has promised to scrap regulation that constrains economic growth and said last year he would review economic and competition regulators that did not take growth seriously.
Chief Executive Nikhil Rathi told a committee of lawmakers that Finance Minister Rachel Reeves had been the first minister he had seen to put in writing that she would stand behind the regulatory system if less red tape led to failures.
But he told the House of Lords financial services regulation committee that the regulator needed an informed discussion about risk metrics.
“What are the metrics around tolerable failure? What does that look like in practice? And I think it’s a perfectly legitimate question to ask, because we do need to move forward … with a high degree of consensus around this,” added FCA Chair Ashley Alder.
Reeves ousted the chair of the Competition and Markets Authority on Tuesday after he failed to prioritise its growth agenda.
Marcus Bokkerink’s removal came a day after Donald Trump returned to the White House, vowing to cut regulation on sectors including technology, throwing down the gauntlet to other jurisdictions.
Reeves has already tasked the FCA and other regulators to outline how they are creating a regulatory environment that boosts investment and innovation.
Alder told the committee that proportionate regulation was key. But he noted there would be no return to the era of “light touch” regulation that preceded the 2008 financial crisis.
“Absolutely, we will embrace proportionality in the right places, but we’re not reverting to light touch,” he said.
Rathi’s five-year term at the FCA ends on Sept. 30. He has not been publicly drawn on whether he would seek a second term.
(Reporting by Kirstin Ridley; Editing by Alison Williams)
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