Government's effort to minimize bureaucratic obstacles faces considerable unlikely victory, as per Andy Haldane's statement.
Rewritten Article:
Regulatory Overhaul Necessary, Says Andy Haldane for Economic Growth
Former Bank of England Chief Economist Andy Haldane, speaking at the City AM Awards in London's Guildhall, slammed the government's approach to regulatory reform, advocating for a formal rewrite of regulators' mandates to enable more risk-taking and spur economic growth.
Haldane's criticism centered on the government's policy of attempting regulatory reform through exhortations and press releases, urging ministers to provide "air cover" for regulators. He warned that Labour's deregulatory agenda could amount to a "missed opportunity" unless the mandates of bodies like the Financial Conduct Authority (FCA) and the Competition and Markets Authority (CMA) are rewritten into law.
The economist called for a significant reduction in the number of regulators and their rulebooks, suggesting a halving would be achievable without compromising substance. In his speech, Haldane cited a world "riddled with both risk and risk-aversion" and a climate of "no or low return, no or low investment, low or no growth," resulting from a series of economic shocks over the past two decades.
Haldane described this state as "essentially the story of the past couple of decades" and argued that greater risk-taking backed by radical regulatory reform was essential for the UK to break free from the cycle of "doom and gloom" driven by uncertainty, risk-aversion, and low growth.
Emphasis on Words Over Actions
Observing the government's stance on deregulation, Prime Minister Keir Starmer has attributed "a morass of regulation" as the cause for restricting "billions of pounds more of investment from flowing into Britain." Starmer has pledged to "sweep away" red tape.
However, while Haldane characterized the government's direction on deregulation as "directionally right," he cautioned about the lack of robust action coupled with persuasive rhetoric. Citing the need for a shift in emphasis from words to actions, Haldane argued that the regulatory landscape created during the global financial crisis, with its focus on risk management, is no longer applicable given the current environment characterized by low risk-taking.
The FCA has committed to a more proactive review of financial regulation under Haldane's guidance. Haldane himself recently retired from his position as CEO of the RSA and emphasized the need for a comprehensive industrial strategy, backed by substantial action and resources, to complement any deregulatory agenda.
He stated that the government's forthcoming industrial strategy, set to be announced this summer, should capitalize on the UK's inherent strengths, with a particular emphasis on financial services.
Leaning into Risk for Growth
In a closing optimistic note, Haldane suggested that the City of London could harness global uncertainty to its advantage, drawing parallels to the creation of the global insurance market following the Great Fire of London. He encouraged the UK and the City to champion innovation to manage and mitigate risk, act with boldness, and lean into risk rather than retreat from it, as a means to attract investment and bolster growth.
- Andy Haldane, the former Bank of England Chief Economist, advocated for a formal rewrite of regulators' mandates, claiming that the government's approach to regulatory reform has been insufficient to foster economic growth.
- Haldane warned that the Labor party's deregulatory agenda could be a missed opportunity unless the mandates of bodies like the Financial Conduct Authority (FCA) and the Competition and Markets Authority (CMA) are rewritten into law.
- Citing the need for a shift in emphasis from words to actions, Haldane cautioned against the lack of robust action coupled with persuasive rhetoric in the government's approach to deregulation.
- The economist emphasized the necessity of a comprehensive industrial strategy, backed by substantial action and resources, to complement any deregulatory agenda.
- In a closing optimistic note, Haldane encouraged the UK and the City to lean into risk rather than retreat from it, as a means to attract investment, boost business, and harness global uncertainty, as an analogy to the creation of the global insurance market following the Great Fire of London.
