The government should consider merging the UK’s several financial services regulators into one body post-Brexit, an influential Tory think tank has said.
A new report from the centre-right Policy Exchange, which was founded by Michael Gove, today said “meeting the demands” of the multiple City regulators can be “a major barrier to innovation” for new firms.
The think tank also said creating a single regulator would “enable greater accountability for regulatory performance” and lead to more talented people being put in charge of regulating the sector.
The Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority are the UK’s two major financial services regulators.
However, the Competition and Markets Authority (CMA), Pensions Regulator and Payment Systems Regulator also have roles in regulating the City.
The report comes after the government recently introduced the Financial Services and Markets Bill, which creates a mechanism to shed hundreds of EU rules and forces regulators to consider the UK’s international competitiveness when making new decisions.
A source from the FCA hit back at Policy Exchange and said the regulator would be “concerned about anything that restricts our ability to operate”.
“There are things we’ve recently done to show we’re agile and listening to concerns, like implementing changes to the listings regime at pace,” they said.
A Treasury spokesperson said the current web of financial services watchdogs was “the most effective way of ensuring clear and robust regulatory focus on macroprudential, microprudential, economic, and conduct risks”.
“The government is committed to ensuring the UK’s financial services regulatory framework is agile and proportionate, supportive of innovation and long-term growth, whilst effective in scrutinising regulators for their respective and evolving briefs,” they said.
The FCA, PRA and Pensions Regulator declined to comment.