Andrew Griffith, the UK’s financial services and city minister, has said that the government respects the operational independence of the country’s financial regulators, but ministers should have room to intervene if they need to.
A draft financial services and markets bill (FSMB) is before parliament for approval, giving UK financial regulators powers to amend rules inherited from the European Union, reform capital rules for insurers and introduce Britain’s first set of rules for stable coins.
The aim is to create a new directive and force British regulators to consider the City’s growth and competitiveness.
Discussing the draft bill before the Treasury Committee, Griffith said he did not want ministers interfering in day-to-day regulatory decisions, but that there is a need for a “safety valve” to allow them to intervene if need be, and this would be used “sparingly” and “public policy-led.”
When pressed by MPs, though, he declined to elaborate on how far the intervention power would go in requiring regulators to review a rule.
This safety valve clause would be introduced to the bill once the ministry finalises the wording in coming weeks, Griffith said.
MPs on the committee warned that the new government had not shown respect to financial institutions, citing the recent firing of experienced civil servant Tom Scholar.
Griffith argued for the balance between “the independence of the regulator and the ability of the treasury to intervene.”
He also confirmed that the current regulatory structure was intended to remain as is.
He said that it was his “belief and desires outcome” was that there was no disruption to the regulatory structure.
During the Conservative Party conference held last week, the government said that it plans to scrap all EU regulation by the end of next year.
However, some of the EU’s rules would be transferred to UK financial rulebooks, Griffith said.
“There is no desire to diverge for its own sake,” he added.
