Amendments should be made to the Financial Services Bill to ensure the Financial Conduct Authority (FCA) properly promotes UK financial services in the global market, a think tank has said.
The Centre for Policy Studies (CPS) called for two key amendments to be made to the bill - to legislate to ensure the FCA operates in support of British companies' and to ensure a competitive market for the provision of banking services is "an important part of the PRA's banking safety objective".
CPS advisory council member Howard Flight, who wrote the report, argued the Treasury's reluctance towards including any direct references to international competitiveness and domestic competition comes from an aversion to being associated with ‘light touch' regulation.
Flight said: "This stems from a mis-diagnosis of the primary causes of the crisis in the UK. These were not so much the fault of light touch regulation as failures of corporate governance in major banks, loose monetary policy, and lack of oversight on banks' balance sheets."
He also warns against blanket condemnation of the financial services, adding banks are only a part of Britain's financial services industry.
"The massive investment management industry, the life and general insurance industries, Lloyds', stock brokers, hedge funds and all the other business service activities provided in London, came through the 2007/09 crisis in reasonable shape and without requiring any tax payer support.
"These industries are substantial contributors to the wealth of the nation and should be regarded as great national assets."
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