The APPG on challenger banks and building societies it’s today publish its report on the role financial services can play in driving the leveling up agenda.
It highlights the regulatory intransigence that holds back challenger institutions and stifles competition. Furthermore, the report finds that the big high street banks remain insulated from competitive forces and the obsession with preventing regulators from failing has made it impossible for challenger institutions to compete with the big banks on a level playing field.
The report’s recommendations include using the current Financial Services Bill in Parliament to bring about a Financial Services Big Bang, to break restrictive regulatory practices that enshrine the dominance and market share of major banks in street.
It also calls for breaking the shackles of excessive regulation which disproportionately impact growing challenger institutions, and leveling regulatory thresholds like MREL which are set much lower in the UK than elsewhere in the world and discourage growth. and innovation. .
The APPG recommends that the government takes action to accelerate the growth of Fintech and advocates for better financial education in schools, both at primary and secondary level, to help people across the UK to take better financial decisions.
The Right Honorable Karen Bradley MP, Chair of the APPG on Challenger Banks and Building Societies commented“Upgrading is a key government priority and the current cost of living crisis only re-emphasizes its importance. Financial service providers can play an important role, but overly cautious regulation is holding them back.
“Regulators are afraid of failure, which means many are forced to operate with one hand tied behind their back and it doesn’t have to be.
“Both Conservative leadership candidates have made it clear that they want to make big and bold political decisions. The recommendations outlined in this report are easy to implement within the current Financial Services Bill, are cost-neutral, and have the potential to bring real and lasting change to communities across the country. UK.
Dan Frumkin, CEO of Metro Bank, added“The race to the top must go beyond a mere slogan, especially given the current difficult economic climate. If done right, channeling new investment, funding and opportunity will change the fortunes of entire communities. Challenger banks and building societies, including community banks like Metro Bank, are poised to play an important role in this – but our potential continues to be held back because rules and regulations aimed at de-r