Liz Truss to merge three financial regulators

According to reports in the Financial Times, the current foreign secretary and frontrunner to become the next prime minister will launch an immediate review of the roles and responsibilities of the regulators if she moves into 10 Downing Street. 

This could see the Financial Conduct Authority, the Prudential Regulation Authority and the Payment Systems Regulator rolled into one new body. 

It’s an idea that has been criticised by former business secretary Vince Cable, warning such a merger would be “dangerous”. Speaking to the Guardian, the former Liberal Democrat leader added: “It is a decade and a half since the banking crisis that did so much damage to the British economy. 

“Much time, manpower and money has been spent establishing a system of regulation to ensure that the financial sector does not again impose serious systemic risk.” 

He also told the outlet that, while the leadership contest between Truss and former chancellor Rishi Sunak had been peppered with “vague” promises that could fall by the wayside, “the proposals for financial regulation are, by contrast, more specific and more likely to see the light of day. That is why they are dangerous”. 

Additionally, Cable warned an overhaul would lead to unnecessary disruption and costs. He explained: “The adage ‘if it ain’t broke, don’t fix it’ has force here especially as the machine was so difficult to assemble. 

“The financial regulators already have a problem holding on to staff who are constantly being poached by the firms being regulated with the offer of better pay packages. Administrative upheaval doesn’t help.”