Britain’s regulators can be slow, inefficient and unpredictable, raising costs and slowly damaging the financial sector’s global competitiveness, industry body TheCityUK said in a report.
Complex, opaque and slow authorisations, such as for a new chief executive or a new product, can discourage growth and investment, the report published on Thursday said.
It said The Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA) were taking steps to speed up authorisations, but further action was needed.
The report was based on interviews with 20 industry leaders and a survey of 40 firms, with 83% of respondents saying Britain’s international competitiveness was slowly being damaged by regulatory inefficiencies.
It recommends that regulators are “commercially aware” of the challenges the firms they regulate are facing, publish better performance data on authorisations, enhance communication with firms, adopt a ‘digital-first’ approach and train authorisation staff better.
“The UK is one of the world’s leading international financial centres, but our competitors are biting at our heels. Complacency is not an option,” TheCityUK Chief Executive Miles Celic said.
Britain is pushing through many reforms to financial rules to help the City of London remain globally competitive after being largely cut off from the European Union by Brexit, ushering in new competition from centres like Amsterdam and Paris.
TheCityUK said it welcomes the so-called Edinburgh reforms to boost London as a global financial centre.
“Successfully updating the rules also depends on the referee implementing them in the same spirit and with the same energy,” Celic said.
The Bank of England said it recognised the need to improve the timeliness of approving senior managers in particular and was taking steps in line with many of the recommendations.
“This report supports our decision to invest heavily last year heavily in staff and technology, resulting in our pending caseload falling by 50 per cent, even as our workload and level of scrutiny of firms increases,” the FCA said.
“We have already announced that we will publish more metrics about our performance soon and will shortly be testing automated application forms to make applications quicker to assess.”
Britain’s finance ministry is due to launch in coming weeks a public consultation on rules for vetting senior managers at banks and insurers, with a focus on streamlining the process.