Source · Select Committees · Treasury Committee
Recommendation 9
9
Paragraph: 73
In designing the new secondary objective, there should also be some consideration for the ways...
Conclusion
In designing the new secondary objective, there should also be some consideration for the ways in which financial services serve the ‘real economy’. The financial services industry can help deliver economic growth not simply by growing itself but also by facilitating economic growth by providing capital, credit, insurance and other services to firms in the ‘real economy’.
Paragraph Reference:
73
Government Response
Acknowledged
HM Government
Acknowledged
The government notes this recommendation. Following close consultation with the PRA and the FCA, Clause 24 of the FSM Bill implements new secondary objectives for the FCA and the PRA to provide greater focus on the medium to long-term growth and competitiveness of the UK economy. The secondary objectives for the FCA and the PRA introduce a new focus within the regulatory framework on these important issues, while still maintaining the regulators’ focus on their existing objectives of ensuring that UK firms remain safe and sound, that the UK’s markets function well, that there is effective competition in the interests of consumers, and that consumers and users of financial services receive an appropriate degree of protection. The government is committed to maintaining high regulatory standards in the UK, so these new objectives are subject to regulators aligning with relevant international standards. The Bill also only enables the FCA and the PRA to act in a way which facilitates growth and international competitiveness in the medium to long-term. Resilient and efficient markets, underpinned by effective regulation and competition, are essential prerequisites for fostering an internationally competitive financial services sector that in turn facilitates long-term growth and international competitiveness of the UK economy.