In a "remit" letter sent to the UK Financial Conduct Authority CEO Nikhil Rathi last week, Chancellor of the Exchequer Rachel Reeves charged the regulator with promoting "sensible risk-taking" in the financial sector.
"While pursuing your operational objectives of securing an appropriate degree of protection for consumers, protecting and enhancing the integrity of the financial system, and promoting competition in the interests of consumers, you should also consider how you can enable informed and responsible risk-taking by authorised firms and customers," Reeves wrote. “These are all prerequisites for growth, and for ensuring that everyone across the UK can benefit from that growth.”
In her speech delivered at the Mansion House on the same day, Reeves went further, arguing that the current regulatory regime has served to stifle appropriate risk-taking. "It was right that successive governments made regulatory changes after the Global Financial Crisis to ensure that regulation kept pace with the global economy of the time, but it is important that we learn the lessons of the past," she said. "These changes have resulted in a system which sought to eliminate risk taking. That has gone too far."
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