HM Treasury  

MPs urge FCA to do more for financial inclusion

The committee urged that it would remain alert for any evidence that regulators are coming under undue pressure from the Treasury to inappropriately weaken regulatory standards. 

A Treasury spokesperson said: "We welcome the committee’s report, which supports many proposals that came out of our Future Regulatory Framework Review. 

"These reforms provide a once-in-a-generation opportunity to ensure that the UK maintains a coherent, agile, and internationally respected approach to financial services regulation after leaving the European Union. We will legislate shortly to bring them into force."

Meanwhile, although the committee argued there should be a secondary objective, it said the wording will be crucial.

“Pursuing international competitiveness in the short term is unlikely to lead to economic growth or international competitiveness in the long term if it is achieved by weakening the UK's strong regulatory standards”, it said. 

“Weakening standards could reduce the financial resilience of the UK's financial system and undermine international confidence in that system and the firms within it. “

In designing the new secondary objective, the committee said there should also be some consideration for the ways in which financial services serve the economy.

“The Treasury should continue to reject any calls for a growth and/or competitiveness objective to become a primary objective. This would increase any pressure on regulators to trade off competitiveness against resilience, and would undermine the regulators' ability to deliver on their core functions. 

“There is a danger that as memories of the financial crisis fade, its lessons are forgotten." 

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