First reported in the Financial Times, this could mean the bringing together of the Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA) and the Payment Systems Regulator (PSR).
The regulators used to be one single body called the Financial Services Authority (FSA) and this was split following the 2008 global financial crash following criticism over its failure to regulate the banks.
The FSA was splintered in April 2013, four months after the Financial Services Act 2012 received royal assent.
Truss has also suggested that as Prime Minister she would review the Bank of England’s mandate after she said the central bank was too slow in putting up the base rate. She later said ministers could gain the power to override the bank’s decisions if it is deemed to be too cautious in its actions.
These changes could come under the Financial Services and Markets Bill.
The Bank of England’s governor Andrew Bailey penned a letter to the Treasury Select Committee last week in response.
He wrote: “Regulatory independence is important, not least because our international standing, and therefore the competitiveness of the UK financial sector which the reforms are aimed at enhancing, depends on it. Anything that would weaken the independence of regulators would undermine the aims of the reforms.”
Reversing post-financial crash reforms
Tom Selby, head of retirement policy at AJ Bell, said undoing the decision to split the financial regulators to bring regulatory powers under one roof “would be a major undertaking”.
He added: “When applied effectively, regulation can provide vital protection for savers and investors. The FCA, PRA and PSR all play slightly different roles in the UK regulatory system, so it will be important any merger maintains the key protections each individual regulator is currently responsible for.”
