During the annual international conference hosted by TheCityUK, UK’s Business Secretary, Kemi Badenoch, spoke out about the excessive rules that she believes are stifling growth in financial services. She emphasized the importance of avoiding cultural issues that could hinder progress. In her role as a business secretary, Badenoch often has to reject what she considers to be bad ideas. She has written to UK financial regulators to caution against proposed mandatory ethnicity quotas, which she believes would be counterproductive and unnecessary by law.
According to major UK investors, one in 10 management roles in UK financial institutions are held by Black, Asian or other ethnic minority staff. These investors advocated for mandatory ethnicity pay gap reporting to promote more equitable workplaces. The Financial Conduct Authority (FCA) is currently seeking ways to enhance diversity and inclusion in UK financial services through consultation.
Drawing 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 also pointed out how regulations have shifted from focusing solely on 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, Badenoch’s speech at TheCityUK conference highlights the growing concerns among business leaders about the impact of excessive regulations on growth and innovation in the financial sector. As a business secretary, Badenoch is committed to finding ways to strike a balance between promoting diversity and inclusion while ensuring that regulations do not stifle progress in the industry.