Liz Truss considering overhaul of financial regulators, sources say

Truss regulators Image credit: Clicksbox via Shutterstock

UK prime minister candidate Liz Truss is set to review the roles of the country’s financial regulators if she wins, according to sources close to the Truss leadership campaign.

As reported by The Financial Times, the Conservative leadership frontrunner is considering a merger of the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA), and the Payments Systems Regulator (PSR) to create a singular new regulatory body.

Truss has been said to be privately critical of the FCA by an unnamed financial services executive. UKTN has reached out to Truss for comment.

It is unclear what would become of the individual leadership of each of the regulators, should a merger go through. However, Truss’ supposed disdain for the FCA could put its chief executive, Nikhil Rathi, at risk.

The FCA regulates financial firms, with the goal of maintaining consumer protection and encouraging a high standard of integrity.

The regulator has a significant role within the UK tech industry, as it presides over the fintech sector, as well as increasingly being involved in the cryptoasset industry, despite regulatory challenges.

FCA officials have been openly critical of the cryptoasset industry. The body’s former chair, Charles Randell, in May questioned the legitimacy of “speculative crypto tokens”, warning that the volatile nature of cryptocurrency values puts investors at serious financial risk.

Rathi, meanwhile, has warned that the global reach of cryptocurrencies makes them difficult to be regulated. The FCA boss then reaffirmed the FCA’s position on digital assets, saying “as we have consistently warned, if you invest in crypto, you need to be prepared to lose all your money”.

A campaign insider earlier confirmed to the FT that “no decisions have been made on the future of regulators. Liz will look at their role as part of a review. She’s clear that there has not been enough focus on economic growth.”

The FCA has also been critical of the buy now, pay later (BNPL) industry, calling for regulation of the sector amid the rise in the cost of living.

In May, FCA staff went on strike over pay, working conditions and union recognition.