By Sinead Cruise and Lawrence White
LONDON (Reuters) -Britain’s Financial Conduct Authority will reassess its attitude towards financial firms’ risk-taking in order to spur growth, the watchdog said on Tuesday, as it set out its next five-year strategy.
The FCA’s plan is focused on four previously announced priorities: helping consumers, fighting crime, supporting growth and being a “smarter” regulator.
As part of that the regulator will “look again at our collective attitude toward risk,” FCA Chair Ashley Alder said in its strategy announcement.
“Too often the focus has been on the risks of a decision taken rather than the lost opportunity of taking none. We want to change that,” he said.
The FCA’s updated mission statement will be likely welcomed by Britain’s Labour government, which is betting on faster growth in financial services to help kickstart a lacklustre economy, where growth is expected to roughly halve in 2025 to about 1%.
The watchdog’s strategy document released on Tuesday gave few details of concrete changes it will make to how it assesses firms’ risk taking, but said it will ensure “less intensive supervision for those demonstrably seeking to do the right thing”.
The FCA and sister regulator the Prudential Regulation Authority have secondary objectives to promote the domestic and international competitiveness of the UK financial industry.
With Chancellor Rachel Reeves pushing to keep fragile fiscal plans intact, the regulators face increasing pressure to loosen red tape on financial firms, which contribute 110 billion pounds in taxes per year or 12% of all UK tax receipts.
The FCA said the industry had given “clear feedback” that now was not the time for widespread changes to its rules. The regulator has pledged to avoid a “widespread overhaul” and said it would engage with the industry to strike an appropriate balance.
The regulator earlier on Tuesday said it is weighing changes to disclosure rules on mortgages, lending and savings products to give clearer information to consumers.
The watchdog said it wanted to retire hundreds of pages of outdated guidance and supervisory publications as part of a broader plan to streamline demands on financial firms, which it said would give product providers more flexibility to tailor communications to customers’ needs and preferences.
It also said it would review parts of its credit advertising rules, such as lengthy terms and conditions.
(Reporting by Sinead Cruise and Lawrence White; Editing by Christian Schmollinger and Louise Heavens)
