Philip Hammond’s Spring Budget has not sprung any surprises on financial regulation. The Chancellor is required to write to FCA and PRA (to be operated by the Prudential Regulation Committee) each year with recommendations, and has accordingly done so.
The letter to FCA applauds FCA’s work to date, and highlights that:
- the Government is particularly keen to see more competition generally, but particularly in retail banking – so FCA should be looking to minimise entry barriers and to get a diversity of business models within the industry;
- it is important the sector makes finance available to help the economic growth the UK economy seeks;
- the UK, and London, need to remain leading and attractive places for international financial institutions to do business;
- the Government is keen to see innovation in ways of engaging with consumers and raising capital, and encourages diverse business models, with proportionate regulatory burdens;
- improved competition can open the UK to new ways of doing things and being seen as an attractive place to do business; and
- the Government wants to see financial services working in the best interest of customers, which will come through improved competition and businesses having regard to the needs of different consumers.
The recommendations for the PRC are the same.