Rishi Sunak could be about to enter battle with City of London regulators after he confirmed the government will press ahead with new intervention powers for ministers.
According to the FT, the intervention power will enable Treasury ministers to overrule the watchdogs.
The Bank of England have said they believe the policy will undermine their independence and weaken confidence in London as a centre of finance. However, Sunak has indicated to the Treasury that he wants to proceed.
The Treasury said: “We have confirmed our intention to bring forward an amendment to the financial services bill, to include an ‘intervention power’, that will enable the Treasury to direct a regulator to make, amend or revoke rules where there are matters of significant public interest.”
The FT said that Sunak wants to balance a commitment to financial stability and independent regulation with his desire to make the City a post-Brexit engine for higher economic growth.
Responsibility in this area now exists with Chancellor Jeremy Hunt and City minister Andrew Griffith.
Prudential Regulation Authority CEO Sam Woods highlighted that ‘some might think that such a power would boost competitiveness.
He added, “My view is that through time it would do precisely the opposite, by undermining our international credibility and creating a system in which financial regulation blew much more with the political wind — weaker regulation under some governments, harsher regulation under others.”
Earlier this year, former Prime Minister Liz Truss had planned to merge the Financial Conduct Authority, the Prudential Regulation Authority and the Payments System Regulator into a single new body.
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