The government is set to push ahead with new powers to overrule the City’s regulators despite protestations from top staff at the Financial Conduct Authority and Bank of England.
Ministers are set to get the right to ‘call-in’ regulatory decisions as part of the landmark Financial Services and Markets Bill, the government’s attempt to set a new course for regulation in the wake of Brexit and free up the City.
The Treasury has confirmed to the Financial Times that it is still seeking the intervention power in the face of a growing chorus of opposition from the regulators it will impact.
The government will be able to “make, amend or revoke rules where there are matters of significant public interest”, it said.
The bill’s first iteration did not include an overrule power, only a weaker right to ask the regulators to review their decisions.
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Then City minister Richard Fuller said last month that the government planned to table an amendment to introduce a call-in, with the exact mechanism yet to be determined.
However, the chances of a U-turn on the move had increased in recent weeks as Sunak, who had sounded a less aggressive note on post-Brexit deregulation than Truss, took charge, and a reshuffle of the top Treasury team occupied lawmakers’ time and attention.
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FCA chief executive Nikhil Rathi and Bank of England deputy governor Sam Woods made another significant intervention on 27 October, warning over the risks to financial stability and independence should a call-in power be granted.
Other MPs have attempted to introduce other amendments into the bill to make it more consumer-friendly, including adding financial inclusion to the FCA’s remit, and placing an increased focus on the UK’s climate commitments.
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