By William James and Tommy Reggiori Wilkes
LONDON (Reuters) – Britain’s financial watchdog said on Friday it would work with the government on a new approach that supports economic growth, as it outlined a series of proposals that include making mortgages easier to access and reducing regulations.
“We want to work with you in a fundamentally different way to support the growth mission,” Financial Conduct Authority (FCA) chief executive Nikhil Rathi wrote in a letter sent to Prime Minister Keir Starmer and Chancellor of the Exchequer Rachel Reeves.
Reeves called on UK regulators to remove barriers to growth, tasking them with creating a regulatory environment that encourages investment and innovation.
She also urged regulators to institute cultural changes to ensure growth instead of focusing “overly” on risk management.
“To achieve the deep reforms needed, your acceptance that we will take greater risks and rigorously prioritize resources is essential,” Rathi said in the letter.
The FCA chief said politicians, among others, must accept that more risk-taking would lead to more failures and that it could not “stop all damage” when making decisions about which cases the regulator will handle.
Outlining his proposals for reform, Rathi said the FCA would seek to boost capital investment, accelerate digital innovation and reduce regulatory burden.
In the mortgage market, the regulator will start by “simplifying responsible lending and mortgage advice rules, supporting home ownership and opening a debate on the balance between access to loans and levels of defaults”.
More broadly, the regulator said it would assess the proportionality of reporting requirements for some companies.
“We could go further and, with government support, reduce the cost of anti-money laundering measures by easing ‘know your customer’ requirements for small transactions,” Rathi wrote.
Britain’s push to cut red tape comes amid expectations that the new Trump administration will cut or loosen rules in the United States.
Bank of England deputy governor Sam Woods said this month that Britain should avoid engaging in a “race to the bottom” over financial regulation.
The BoE said on Friday it would delay the implementation of tougher global rules on bank capital until 2027.
Among his proposed digital reforms, Rathi said the FCA was considering removing the £100 ($122) cap on contactless card payments, giving businesses and consumers more flexibility.
($1 = £0.8202)
