LMG says words are not enough, competitiveness objective needs ‘teeth’
The London Market Group (LMG) has warned that the incoming financial services bill designed to support UK competitiveness and attract investment and capital could end up being just a “tick box exercise” unless the rules are given “teeth” and regulators are held accountable.
The LMG has been campaigning over the last year for five concrete changes that it believes will allow the market to seize new global market and trade opportunities. It has developed proposals about how both the Bill and the current Solvency II Review could help to facilitate a “real boost” in UK competitiveness and inward investment.
The House of Lords Industry and Regulators Committee inquiry on the regulation of commercial insurance and reinsurance raised concerns about the lack of regulatory proportionality which they found was holding back the market.
“We are delighted that the Government is proposing to include a competitiveness objective in the new Financial Services and Markets Bill, but words are not enough,” said Caroline Wagstaff (pictured), CEO of the London Market Group.
“If there is any chance of the reforms succeeding, they must ensure that the regulators can be held accountable for delivering on these new duties. For this bill to change the way the regulators operate it needs ‘teeth’.”
Wagstaff further explained that “our concern at the moment is that this might be treated as a tick box exercise rather than something which can seriously support UK competitiveness. For us, the success of this development hinges on establishing an approach to regulation that genuinely focuses on risk and sets the right rules for the right firms in the right way. It also rests on measuring change. So, our second document offers some practical suggestions by which this competitiveness agenda can start to be established and measured.
“These suggestions include getting the basics of operational effectiveness right to give a platform to build on, however, it should also involve setting the tone for future ‘activity-specific’ regulation by increasingly considering proportionality in current and ongoing activity. A focus on proportionality will help lay the groundwork for the growth of new entrants, new business models and the wealth of new investment opportunities that exist.”
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