Ministers will this week take a further step towards imposing obligations on regulators to promote the competitiveness of Britain’s financial services industry.
Sky News understands that the Treasury will publish a call for proposals on Tuesday that will seek ideas for ways to measure watchdogs’ compliance with the new requirements.
The move to solicit suggestions from the financial services industry, one of the UK’s largest by GDP, regulators themselves and other stakeholders will be viewed by some as setting the stage for a renewed confrontation between the government and the City’s supervisory bodies.
However, the City minister Andrew Griffith – a former executive at Sky News’ parent company – is said by officials to be determined to embed the new secondary competitiveness and economic growth objectives within the Financial Conduct Authority and Prudential Regulation Authority as swiftly and comprehensively as possible.
One source with knowledge of the paper being published this week said it would be an important staging-post along the road towards a new system of accountability for regulators.
“Just as we successfully export our regulatory know-how to the world, the government wants to learn from what competitor international financial centre jurisdictions use as their yardsticks of success,” the insider said.
During Rishi Sunak’s stint as chancellor, the government committed to publishing an annual ‘State of the City’ report, which was unveiled for the first time last year.
The government has agreed to jointly author the second iteration of the report alongside the City of London Corporation.
Mr Griffith is involved in steering the Financial Services and Markets Bill through parliament, with the UK’s post-Brexit Future Regulatory Framework being drawn up to develop a more agile system of oversight which nevertheless commands international respect.
In recent months there has been increasing disquiet over the FCA’s listings regime for public companies, with a number of businesses, such as the Betfair-owner Flutter Entertainment, unveiling plans to list their shares in the US.
Meanwhile, ARM Holdings, the chip designer, has opted to float in New York, snubbing its home market, while the founder of Revolut, the British-based fintech giant, criticised UK regulators about the pace of their decision-making in an interview with The Times.
Last week, the FCA unveiled a long-awaited overhaul of the London listings framework, although there are doubts about whether it will go far enough to swing the pendulum back towards the UK.
Regulators have privately expressed reservations about the move to impose competitiveness objectives on them, with some officials there citing the recent turmoil in the banking sector in the US and Europe as evidence of the need to remain focused on ensuring financial stability.
Last year, Sky News revealed that Andrew Bailey, the Bank of England governor, had expressed disquiet about a ‘call-in power’ that would have given the Treasury powers to overrule financial regulators.
Ultimately, the Treasury said the intervention powers would not proceed.