Earlier this week, the UK government announced that the Payment Systems Regulator (PSR) would be abolished, with its operations merged into the Financial Conduct Authority (FCA).
"For too long, the previous government hid behind regulators — deferring decisions and allowing regulations to bloat and block meaningful growth in this country," said Prime Minister Keir Starmer. The decision to axe the PSR is a part of his government's broader effort to evaluate the country's ~130 regulators to determine which can be restructured or removed entirely.
"The regulatory system has become burdensome to the point of choking off innovation, investment and growth," added Chancellor Rachel Reeves. “We will free businesses from that stranglehold, delivering on our Plan for Change to kickstart economic growth and put more money into working people’s pockets.”
However, some have questioned the decision to focus on the PSR, which already shares an office with several senior staff members of the FCA. With only 160 employees and a budget of £28 million, the process of formally dismantling the regulator may bring about a limited return on investment.
"I don't think it would produce payback in the life of this parliament," former FCA Chair Charles Randell told the FT. “It presumes an organisational reworking that could mean two years in which little gets done but at the end people are doing the same thing while wearing different badges.”
For more from Charles Randell, don't miss his In Focus article from our 2024 Compendium, entitled “Cornerstone Questions.”
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