37 civil society groups have come together to oppose plans for financial regulators to prioritise ‘international competitiveness’ – a Trojan horse for sweeping deregulation that could cause financial instability as well as threatening the government’s net zero target & levelling up goals. 9 in 10 Brits oppose the move, according to new research by the Finance Innovation Lab.
The UK Financial Services industry faces the biggest shake up of regulation in a generation. Still scarred by the global financial crash of 2007/08 that ruined lives and livelihoods for millions of people, British consumers have sent a clear message to the Government concerning their attempts to focus regulation on making the financial sector more ‘internationally competitive’.
Today, we are proud to join 36 other leading charities and public interest groups in signing a public statement in response to the Government’s major new plans for the Financial Services Future Regulatory Framework. The letter opposes a proposal to give financial regulators statutory objectives to promote the ‘international competitiveness’ of the industry, which risks eroding the independence and ability of regulators to act in the public interest. Asking regulators to act as a cheerleader for industry will put them in a dangerous ‘race to the bottom’ as regulators across the globe water-down standards.
In 2012 UK parliament acknowledged that regulators’ focus on competitiveness contributed to the Global Financial Crisis of 2007/08 – which saw countless people lose their savings, homes, and jobs, costing an estimated £1.8 trillion in lost GDP.
We recommend that regulators be given statutory objectives to ensure that the regulators bring the financial system in line with the net-zero transition, and promote financial inclusion, as well as rules to ensure greater public accountability and transparency.
Research by the Finance Innovation Lab reveals that over nine in ten consumers (91%) think international competitiveness should not be a top priority for the new UK financial services regulation and instead, the Government’s planned new regulatory framework should focus on the future stability of the financial system, consumer protection and on financial inclusion.
The regulatory framework review is a once in a generation opportunity to improve the rules that support the UK’s financial services sector – and will impact tens of millions of people up and down the country – which is why it’s crucial we get it right.
The consultation closes on 9th February and we will share our submission over the coming weeks.
Read the civil society joint statement and share it on social media, using the hashtags #FinanceForOurFuture #StopDeregulation and #StopTheCityPowerGrab.
For media inquiries about the joint statement, please contact: Marloes Nicholls, Head of Policy and Advocacy, Finance Innovation Lab at
Marloes@financeinnovationlab.org.
