23 January 2025
Following the Financial Services Regulation Committee (FSRC) meeting yesterday to discuss the Financial Conduct Authority and Prudential Regulation Authority’s secondary competitiveness and growth objective inquiry, Erin Sims, director at RSM UK comments:
“The FCA faces a challenging balance between risk and growth. On one hand, they must protect consumers and ensure market integrity, which can be compromised by relaxing rules, potentially leading to higher defaults or increased financial crime. On the other hand, promoting competitiveness and economic growth requires a regulatory environment that encourages innovation and investment.
“This is on the same week as the new US administration under Trump is pushing for deregulation, creating a pro-business environment that could give US banks a competitive edge.
“The FCA must carefully weigh the benefits of regulatory relaxation against potential risks through rigorous cost-benefit analysis. This will require the support of the Government, and acceptable risk thresholds in case of regulatory failures, emphasising the need for shared responsibility to maintain public trust and effective governance.”

