Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Red tape risks turning city into ‘graveyard’, warns Bank of England official

by October 18, 2024
October 18, 2024
Red tape risks turning city into ‘graveyard’, warns Bank of England official

Excessive regulation could turn the City of London into a “graveyard” by stifling innovation and risk-taking, Sam Woods, chief executive of the Bank of England’s Prudential Regulation Authority (PRA), has warned.

Speaking at the City’s annual banquet at Mansion House, Woods cautioned that while financial regulations are necessary for stability, over-regulation could suffocate the financial sector’s ability to drive economic growth.

Woods described risk as the “lifeblood” of a thriving economy, arguing that attempting to eliminate it altogether would hinder innovation and leave the City stagnant. “Risk is the lifeblood of a thriving capitalist economy, fuelling growth and innovation,” Woods said. “The whole point of having a strong financial system is to enable society to take risks.”

His comments come amid growing concerns that Britain’s efforts to make financial institutions safer are becoming counterproductive. Woods acknowledged that the balance between regulation and risk management is difficult but crucial, noting: “It’s implausible that good businesses can thrive in an environment of ever-expanding regulation.”

Woods pointed to recent moves by the PRA, such as the decision to abolish the cap on bankers’ bonuses, as evidence of regulators taking steps to reduce the burden on the City. The cap had been “damaging to competitiveness,” he said, and scrapping it sent an important signal of intent that unnecessary regulations should be rolled back.

The Financial Conduct Authority (FCA) has also faced criticism over its increasing regulatory requirements. In February, the FCA was under fire for proposals to “name and shame” companies under investigation, and it has also faced complaints regarding rules around diversity and inclusion disclosures. Jeremy Hunt, the former chancellor, introduced a new mandate for regulators, including the FCA and PRA, to consider economic growth as a “secondary objective” to their regulatory duties. The move was seen as a direct response to concerns that regulators were holding back the City’s growth potential.

Sir Keir Starmer, who has largely followed the previous government’s regulatory approach, reinforced this direction by urging regulators to take economic growth seriously. Speaking at the International Investment Summit, Starmer said the government would force regulators to focus on growth as a priority.

Nikhil Rathi, chief executive of the FCA, echoed Woods’ sentiments, describing the new growth mandate as “liberating” and leading to more open conversations about risk. Rathi and Woods both stressed the importance of striking the right balance between maintaining stability in the financial system and allowing enough flexibility for businesses to grow and take calculated risks.

David Postings, chief executive of UK Finance, the banking lobby group, agreed, saying: “If we can collectively get the balance right between risk and protection for consumers, this will help in supporting economic growth and financial inclusion in the UK.”

As regulators face mounting pressure to relax red tape and promote competitiveness, Woods’ remarks reflect a broader debate about how to balance the need for stability with the need for growth and innovation in the financial sector.

Read more:
Red tape risks turning city into ‘graveyard’, warns Bank of England official

0
FacebookTwitterGoogle +Pinterest
previous post
UK retail sales rise unexpectedly in September despite economic uncertainties
next post
Crunch time: Harris to team up with Barack and Michelle Obama next week in key battlegrounds

You may also like

The health problems that can afflict high level...

July 19, 2024

PM pledges loyalty to Reeves as Labour vote...

January 14, 2025

Secrets of Success: Leslie Kenny, Founder & CEO,...

February 11, 2024

Young entrepreneur, George Jones, transforms £11m Manchester office...

September 19, 2023

Emma Bridgewater’s Pottery Empire Faces £1.4m Loss Amid...

June 24, 2024

Boost Your Business Growth: A Comprehensive Guide on...

June 23, 2023

Getting To Know You: Johann van Zyl, CEO,...

July 12, 2023

FCA rule change drives Bitcoin price to hit...

March 12, 2024

Vital Skills that Startup CEOs Need, Which Multinational...

January 28, 2025

New Business Secretary announces £95m funding for super-materials...

November 4, 2022

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025
    • House witness flips script on Dem who ambushed him during hearing with unearthed tweet: ‘Iceberg is ahead’

      June 7, 2025
    • Call with China’s Xi, and Trump-Musk exchange fueled barbs during 20th week in office

      June 7, 2025
    • Trump’s conservative allies warn Congress faces critical ‘test’ with $9.4B spending cut proposal

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,568)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved