Skip to content
Search

Latest Stories

FCA warns against regulatory 'race to bottom' in growth push

Nikhil Rathi stressed that embracing a more growth-oriented approach will inevitably involve increased risk.

FCA warns against regulatory 'race to bottom' in growth push
Nikhil Rathi
TOLGA AKMEN

FINANCIAL REGULATOR has cautioned against compromising regulatory standards while attempting to boost economic growth, revealing the delicate balancing act facing Britain's financial oversight.

In a frank discussion with MPs, the Financial Conduct Authority (FCA) leadership highlighted the challenges of their expanded mandate to promote business competitiveness alongside consumer protection, reported the Times.


FCA chief executive Nikhil Rathi stressed that embracing a more growth-oriented approach will inevitably involve increased risk.

"We need collective understanding that pursuing economic expansion means some initiatives might not succeed," he told the Treasury committee.

The warning comes after chancellor Rachel Reeves explicitly instructed the FCA to help firms "compete, innovate and grow" while maintaining market integrity. This new directive signals a significant shift in regulatory philosophy.

FCA chairman Ashley Alder was particularly pointed about avoiding a regulatory "race to the bottom". Drawing lessons from the 2008 financial crisis, he stressed the importance of maintaining robust international regulatory standards.

The timing of these discussions was important, with London's financial landscape facing challenges. Construction equipment firm Ashtead announced plans to relocate its stock market listing to New York, citing it as the "natural long-term venue" - a move symbolic of ongoing concerns about UK market attractiveness.

Rathi candidly acknowledged the inherent tensions in this new approach. "There's a spectrum of risk tolerance," he explained, referencing recent listing rule changes that deliberately create more space for entrepreneurial risk-taking.

In a letter to the chancellor, the FCA leadership pledged to advocate for global regulatory cooperation while recognising they might need to collaborate with a smaller group of like-minded jurisdictions on certain issues. They specifically highlighted potential divergences in areas like green finance and cryptocurrency regulation.

According to reports, the watchdog is exploring a more nuanced, "outcomes-based" approach that focuses on broader expectations of fair treatment rather than prescriptive rules.

Dame Meg Hillier, the committee chairwoman, aptly characterised the situation as an "inflection point" - where consumer protection and economic growth objectives intersect.

Critically, the government has signalled its willingness to accept potential failures as part of the growth strategy. Rathi noted this was the first time a minister had explicitly acknowledged that delivering growth requires societywide risk-taking.

The FCA bosses pointed out that they want to encourage innovation without compromising the fundamental protections that prevent financial misconduct.

More For You

single-use vapes-iStock

Analysis by Material Focus estimates that 8.2 million vapes are discarded or littered each week in the UK—equivalent to 13 every second. (Representational image: iStock)

iStock

Shops told to clear single-use vapes before ban starts on June 1

SHOPS across the UK have until 1 June 2025 to sell off remaining stocks of single-use vapes before a nationwide ban comes into force.

The legislation, confirmed last year, follows a government consultation that showed strong support for restricting their sale and supply.

Keep ReadingShow less
Primark-London-Getty

During his 15-year tenure, Marchant expanded Primark’s store network to more than 450 locations across 17 countries in Europe and the United States. (Photo: Reuters)

Primark chief Paul Marchant steps down after misconduct probe

PAUL MARCHANT, the head of fashion retailer Primark, has resigned with immediate effect after admitting to an "error of judgment" in his behaviour towards a woman in a social setting.

Associated British Foods (AB Foods), Primark's parent company, announced his resignation on Monday.

Keep ReadingShow less
Jaguar’s bold gamble: Can it woo young, wealthy drivers with a £123k EV?

Jaguar’s bold gamble: Can it woo young, wealthy drivers with a £123k EV?

JAGUAR’S ambition to seduce younger, richer drivers was on full display in Paris with a presentation of its newest prototype, the Type 00, which promises all-electric luxury... at a steep price.

The low-slung, muscular-looking concept car presented to European reporters last Friday (21) prefigures a production model expected mid-2026 at a base cost of €150,000 (£123,472.8).

Keep ReadingShow less
Starmer-Trump-Getty

Trump has suggested the possibility of a 'great' trade deal that could help the UK mitigate the impact of tariffs he has pledged to introduce. (Photo: Getty Images)

Starmer, Trump talk trade deal progress in 'productive' discussion

KEIR STARMER and Donald Trump spoke on Sunday about ongoing UK-US trade negotiations, with Downing Street describing the talks as "productive."

Since leaving the European Union, the UK has been working to secure a trade agreement with the United States. Successive British governments have pursued a deal, but it has remained elusive.

Keep ReadingShow less
modi-trump-getty
Trump shakes hands with Modi during a joint press conference at Hyderabad House in New Delhi on February 25, 2020. (Photo: Getty Images)

India-US trade talks end with no sign of tariff relief

INDIA and the United States have agreed to move forward on finalising a part of their bilateral trade deal this year, but there was no indication of any tariff relief for India.

Trade discussions took place in New Delhi ahead of the implementation of US president Donald Trump's new trade tariff regime, which includes import levies on India, set to take effect from 2 April.

Keep ReadingShow less