The pendulum swings away from the dangers

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Rola Khaleda, FT editor, chooses her favorite stories in this weekly newsletter.

Writer Treasury Adviser

Today Leeds reforms were announced. The widest range of changes to financial organization for more than a decade, and it constitutes a newsletter for growth of the United Kingdom in an increasingly incredible and competitive global market.

Our vision can be summarized for each of the eight sectors with high capabilities specified in the modern industrial strategy, including financial services, as follows: laser -like focus on global strengths that we have and design to double them to attract more investment.

This is a vision that I know shared by British companies, businessmen and wealthy creators. But for a very long time, the ambitions of our economy have been stopped through an unexpected regulatory system that has an incompatible position on risk.

Risks, like most things, can be good and can be bad. It is not good for the economy to bear a lot of risks, as happened in the period leading up to the global financial crisis when bad lending accumulated, assets collapsed and working families paid the price. The protection that was placed in the years followed was the right thing to do, with better protection for consumers and more accountability in the system.

But after more than a decade, the pendulum fluctuated in the opposite direction, with an excessive focus on our economy on eliminating the risks completely.

The same defective ruling that witnessed the main infrastructure projects for Newts and Bats is the ruling that requires approximately 140,000 financing professionals to testify that they are fit for their roles on an annual basis. It is the same short -term thinking that slows the licenses of innovative technical technology companies, delaying their journey to growth and reaching capital.

There is no center for other global competitive financial services that imposes such a bureaucracy that is unavoidable on its business, and we should not. The culture of aversion is one of these risks, to the point of obsession with risk in all its forms, is not an approach seen in any of our competitors. It is bad for companies, bad growth and bad for workers.

Given that financial services in the UK have not been recovered as it should have been since 2010, it has flowed less than the capital to companies. Investing in local economies. And opportunities to increase jobs or enhance employee salaries.

Six months ago, I promised that we changed our approach and today we made this promise. In fact, we went further by identifying changes to address a culture of risk that harm savers. Nearly 30 million people in the UK have funds sitting in accounts that pay about 1 percent of interest. This was not safe under the last government, as inflation rose to 11 percent. This has been greatly eroded by the power of spending for people’s savings – and was attached to the damage of the living levels of these savings.

The Covid-19 epidemic has harshly unveiled the lack of savings that the country must retract. Today, there is a wide consensus that people’s support for investment can have great benefits for financial health and the elasticity of many families.

This government will now provide this support, with an advertising campaign led by industry explaining the benefits of investing for all. In addition, next April, banks will be able to alert customers to better investment options so that they can make their savings go further and put more money in their pockets.

Leeds reforms re -balance the standards and provide a commitment to regulate growth. This is the type of reform that I talked about in my MAIS lecture in 2024, and it is the type that depends on stability and investment. It is also a plan for the rest of the economy. These reforms hinder a new era of growth in financial services, but there is still a lot of work to be done for other sectors.

In a world facing deep economic challenges, Britain will operate open markets, responsible innovation and cooperative global growth because we know that our prosperity is inseparable from our commercial partners.

This is how we create, as a commercial state, globally, an economy that works for workers here at home. Economy based on security and flexibility, as Britain again became a beacon for stability and a magnet for investment.