A PYMNTS Company

UK Aims To Boost Competition In Its Financial Services Sector

 |  December 11, 2022

The British government plans to amend the law to make financial services more competitive.

In a Thursday (Dec. 8) letter addressed to Bank of England Governor Andrew Bailey, Chancellor of the Exchequer Jeremy Hunt said the existing competition objective of the Prudential Regulation Authority (PRA) will be supplemented by another.

The Financial Services and Markets Bill, Hunt wrote, “introduces a secondary objective for the PRA to facilitate, subject to aligning with relevant international standards, the international competitiveness of the UK economy (including in particular the financial services sector) and its growth in the medium to long term.”

Read more: UK: Watchdog opens investigation into financial services

This will join the PRA’s existing objectives of facilitating competition for the firms it regulates and promoting the safety and soundness of those firms by ensuring the stability of the United Kingdom’s financial system, Hunt said in the letter.

As PYMNTS reported Thursday (Dec. 8) the Financial Services and Markets Bill was debated in the U.K.’s House of Commons Wednesday (Dec. 7), received cross-party support and will now go to the House of Lords for consideration.

Assuming the bill’s passage isn’t delayed by a lengthy process in parliament, the Bill should become law in the spring of 2023.

In February, the British finance ministry said it was moving forward with its plans to require regulators to consider the financial sector’s global competitiveness when writing rules, even though some in the country believe they make regulators look like “cheerleaders” for finance, Reuters reported at the time.

Many in the country’s financial sector want the PRA and Financial Conduct Authority (FCA) to help the City of London stay competitive around the world, which regulators in many other countries already do.

“The government therefore intends to provide for a greater focus on growth and international competitiveness through the introduction of secondary objectives for the PRA and FCA,” Rohan Lee, deputy director for financial services strategy at the ministry, said in the Feb. 8 report.