The City of London is focusing on increasing its competitiveness and attracting foreign investment amid growing concerns about the district’s financial standing. Chris Hayward, the city’s policy leader, highlighted the critical need for foreign investment to drive growth and strengthen the global competitiveness of London’s financial sector. Addressing the House of Lords’ financial services regulation committee on May 22, Hayward emphasised that the current regulatory mindset is not conducive to achieving these objectives.
Since the U.K. left the European Union, the financial sector has faced significant challenges, with some U.K. companies even considering listing in New York. Hayward argued that the Financial Conduct Authority (FCA) and other regulators have not adequately embraced risk-taking and growth promotion, which hampers the sector’s international competitiveness.
To address this, Hayward proposed the creation of a new public-private body specifically designed to attract foreign investment. He pointed out that while the FCA and the Bank of England’s Prudential Regulation Authority have been tasked with supporting growth and international competitiveness, there remains scepticism about the effectiveness of this secondary objective.
Hayward stressed that a dedicated promotional body is essential to enhancing the U.K.’s competitiveness, especially compared to countries like Ireland. He also noted that parliamentary backing is crucial for regulators to take necessary risks without fear of retribution when issues arise.
The debate over the FCA’s “naming and shaming” plans, where companies under investigation would be publicly disclosed, underscores the need for clarity in the regulators’ statutory duties. Committee member Jonathan Hill suggested that regulators should clearly distinguish between their mandatory obligations and discretionary actions that might hinder growth and competitiveness.
Hayward’s call for change reflects a broader recognition that more proactive measures are needed to ensure the City of London remains a leading global financial hub.
