Can the UK FCA Change Behavior to Foster Growth?

In a recent op-ed published in FT Adviser, Steven Francis, a Financial Services Partner at law firm Faegre Drinker, argues that the UK Financial Conduct Authority (FCA) must change its staff's day-to-day behavior if it is to support the UK government's growth agenda.

Francis contends that while proposed regulatory changes are a sensible move toward deregulation, the primary problem is the "attitude of firm-facing FCA staff." He acknowledges that FCA staff are generally professional, well-prepared, and clever. However, he views their default mindset as one of suspicion and anxiety. This leads them to give undue prominence to even remote risks and to be unwilling to take any risk at all, Francis argues, even when it might lead to better outcomes for clients. This over-cautious behavior, he suggests, is a result of internal pressures to avoid mistakes and a fear of being second-guessed by peers.