Business Secretary Kemi Badenoch Calls for Less Regulation in Financial Services to Promote Growth and Productivity

UK’s Business Secretary, Kemi Badenoch, expressed her concerns about the excessive number of rules in financial services during TheCityUK international conference. She emphasized the importance of not allowing cultural issues to hinder growth in her role as a systems analyst at Royal Bank of Scotland. Badenoch often finds herself rejecting what she considers to be bad ideas, and she mentioned writing to UK financial regulators to caution against proposed mandatory ethnicity quotas, which she believes could be counterproductive and unnecessary by law.

In contrast, major UK investors advocated for mandatory ethnicity pay gap reporting to promote more equitable workplaces. One in 10 management roles in UK financial institutions are held by Black, Asian, or other ethnic minority staff. The Financial Conduct Authority (FCA) is currently seeking ways to enhance diversity and inclusion in UK financial services through consultation.

Reflecting on her experience working in banking and consulting, Badenoch highlighted her past role as a systems analyst at Royal Bank of Scotland. Her firsthand experience led her to believe that the burden of regulation has become too high under successive governments, giving rise to needless and burdensome rules that stifle growth, productivity, and innovation. She expressed concern over pushing for well-meaning but potentially counterproductive measures that could hinder progress in the financial sector.

Badenoch pointed out the shift in regulation from protecting against fraud and systemic failure to now encompassing various aspects such as diversity and green finance. She stressed that an increase in micro management does not necessarily make financial markets stronger. Her opposition to regulations that impede growth reflects her commitment to ensuring that rules in financial services do not hinder progress.

In conclusion, Kemi Badenoch’s concerns about too many rules in financial services have been echoed by investors who advocate for mandatory ethnicity pay gap reporting. While regulatory measures may aim to promote diversity and inclusion, they can also stifle growth and innovation if they become too burdensome or counterproductive. As a former systems analyst at Royal Bank of Scotland, Badenoch has firsthand experience with the negative effects of excessive regulation on productivity and growth within the financial sector.