During TheCityUK international conference, UK’s Business Secretary, Kemi Badenoch, expressed her concerns about the excessive rules in financial services. She emphasized the importance of not letting cultural issues hinder growth. In her role, Badenoch often finds herself having to reject what she considers to be bad ideas. She mentioned writing to UK financial regulators to caution against proposed mandatory ethnicity quotas, which she believes could be counterproductive and unnecessary by law.
One in 10 management roles in UK financial institutions are held by Black, Asian, or other ethnic minority staff, according to major UK investors who wrote to the Financial Conduct Authority (FCA). They advocated for mandatory ethnicity pay gap reporting to promote more equitable workplaces. The FCA is currently seeking ways to enhance diversity and inclusion in UK financial services through consultation.
Reflecting 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 pointed out the shift in regulation from 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.