Brexit is not the ‘driver’ of UK financial regulation and its new ‘Mission’ consultation, but dealing with ‘uncertain times’ is a challenge that must be met, according to Andrew Bailey, chief executive of the Financial Conduct Authority (FCA).
Speaking at the Lord Mayor’s dinner last night at Mansion House, London, Bailey outlined observations within the first four months his tenure and explained the reasoning behind the UK financial watchdog’s release of a new ‘Mission’ consultation, as reported, that was announced yesterday.
He also explained that the shock decision in the UK referendum to leave the EU at the end of June, should not be the key driver for UK financial services regulation.
“After four months of my tenure at the FCA, a lot has happened around us,” said Bailey. “My overwhelming first impression of my new role is of the importance of the public policy objectives that have been entrusted to the FCA. It operates on a very big landscape – a simple indicator of which is that we regulate around 56,000 firms in a wide range of financial services.
“The first question is at the heart of our work, namely “do we protect all consumers to some equal degree all of the time, or do we give more attention to more vulnerable consumers?,” he said
‘Scale and speed of outside developments’
On Brexit, Bailey said that whilst there was pressure on the regulator to move with the changes, and to ensure that EU commitments are met whilst planning for separation, he was adamant that the ‘Mission’ consultation is seen as something more “universal”.
“We need to explain ourselves more than ever because of the scale and speed of outside developments and the prevalence of economic uncertainty,” he said. “One thing I want to make clear is that the Mission is not about Brexit for the simple reason that the issues we tackle in it are universal whatever the outcome of the Article 50 negotiations.”
In his speech, he also asked the questions “what is the role of the regulator in enabling and facilitating change and innovation in the industries it regulates?” and “Can uncertainty really go on rising for long periods?”
“We live in an uncertain world, that we know,” added Bailey. “As a member of the Bank of England Financial Policy Committee, I sometimes find that every quarter we describe the world as more uncertain than ever. I would guess that if there is one thing on which we could agree over the last few months, it is that uncertainty has risen.
“I believe the future Mission [consultation] is a very important start to developing a clear explanation of our purpose. Over the next three months we are looking for as much feedback as possible,” he added.