FCA CEO Nikhil Rathi and chairman Ashley Alder addressed the Treasury Committee, emphasising the need for a balanced approach that considers consumer protection and market integrity alongside growth objectives.

This comes as the government has urged the FCA to play a larger role in fostering economic growth, and amidst concerns over London’s attractiveness as a financial centre following Ashtead Group’s announcement of plans to move its listing to New York.

Mr Rathi stressed the importance of parliamentary support when the FCA’s revised remit inevitably leads to increased risk and potential failures. Mr Alder warned against deregulation, citing the lessons learned from the financial crisis, and advocated for maintaining high international standards.

The FCA, in a letter to Chancellor Rachel Reeves, highlighted potential divergence from international regulatory norms in areas like green finance and crypto assets. They also sought clarity on the government’s definition of “appropriate risk appetite”.

Mr Rathi acknowledged the need for increased risk-taking to stimulate growth, citing the recent overhaul of listing rules as an example. He emphasised the importance of government support when these risks materialise. Mr Alder supported a move towards an “outcomes-based approach” to regulation, but cautioned against a return to the pre-financial crisis “light touch” regime.