U.K. proposes streamlining regime meant to hold fin serve executives to account

Whenever a country’s economy is at risk of stagnating, one obvious tactic may be to cut rules to attract investment and boost growth. And so it goes for the United Kingdom’s financial services sector, long regarded as one of the country’s most profitable industry sectors, accounting for 8.8% of the economy. But while paring down the “compliance burden” is typically welcomed by firms, scrapping rules may lead to wider concerns about the effectiveness of regulatory oversight and corporate governance — and whether the focus on profits over safety is the right tack.

On July 15, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA)—the U.K.’s two main financial services regulators—issued a joint statement saying that they want to “streamline” the regime that holds senior managers accountable for misconduct and negligence. Their goal is to bid to make the industry more efficient and more business-friendly at a time when the U.K. needs talent and money to drive economic growth.