UK financial regulators need to learn by abandoning the “risk aversion culture” from Singapore, strengthening support for economic growth and encouraging businesses more, the House of Representatives said.
Since the banking crisis in 2008, financial conduct and Prudential regulators have introduced “unnecessary friction” that undermine growth and innovation and “block new entrants,” the House Financial Regulation Committee said Friday.
The fellow conclusion that the UK has “valuable lessons to learn from Singapore’s approach to financial regulations” highlights the city of London’s widespread complaints about how the two authorities responded to economic competitiveness and support growth given two years ago.
“Once again, we’ve been told how quickly the financial authorities in Singapore and Singapore turn things around. Culture was one of the very concierge cultures.” “There’s a lot to learn from that,” he told the Financial Times.
But their calls to mimic the business-friendly approach to financial oversight of Asian city-states echoes the Brexit-era threat of turning the UK into “Singapore on Thames.”
Despite the small domestic market, the ability to attract multinationals has reached GDP per capita, the fourth highest GDP after Luxembourg, Ireland and Switzerland.
The committee’s report said Singapore mentioned 21 times on page 139, saying the government and regulators should measure the economic impact of financial regulations and benchmark other countries for areas such as compliance costs and capital requirements.
Regulators around the world are being urged by politicians to ease restrictions on financial services to drive loans, investments and growth. The US Federal Reserve announced last week a plan to look into whether many of the rules created after the 2008 bank conflict remain relevant.
But Lord Forsyth said the level of deregulation under President Donald Trump is “very dangerous” and “not something we should do.”
“We’re not removing the racing business to the bottom or the essential guardrails,” he said. Instead, he added, the committee is asking if it “needs to take three months to approve a CEO with years of experience.”
Pier has called on two major UK watchdogs to work together to establish a Singapore-style “concierge service” and help them be founded in the UK “as part of a broader effort to establish a culture based on efficiency and appropriate flexibility.”
Sam Woods, deputy director of the Bank of England, which leads the PRA, proposed earlier this year to establish such a service with the FCA after visiting Singapore to learn how Singapore (MAS) operated it.
Lords’ report also criticized UK regulators as being too late to approve the appointment of senior management or the establishment of new businesses. It cited an example from an insurance company of how Singapore approved 18 insurance-related security proposals earlier than the UK approved five, despite the UK being a UK innovation.
The committee has established itself as a critic of the voices of financial regulators since it was created last year. Many of its peers have declared non-enforceable roles or other interests to municipal companies, including its holdings of Forsyth at UK lender Secure Trust Bank and the work of Lord John Eatwell as a partner in private equity group Palamon Capital Partners.
However, Forsyth denied that the committee was biased in its favor of financial services, noting that its members include worker Rita Donaghi, the former president of the union conference. “We have a mix of people and this report is absolutely unanimous,” he said.
“They can attack us because they are city mouthpieces, but they should take into account how much investment and loss is being made due to these issues.”
The report cited a warning from the Foreign Bankers Association that approval of a senior UK appointment is “too troublesome and takes too long to get approval, especially compared to other financial centres.
“It appears that there are disproportionate compliance costs in the UK,” said Forsyth, who became an investment banker for JPMorgan and Evercore after becoming a government minister for Margaret Thatcher and John Major.
However, he said he also has the responsibility to create a “mission creep” by staff and push it into areas like equality and sustainability. “To be fair to regulators, some of this comes from high levels of demand placed on regulators by the government.”
