Speaking last night at Mansion House the FCA’s acting chief executive Tracy McDermott said forcing company boards to spend the majority of their time on regulatory matters risks stifling innovation.
She said: “We are often told that boards are now spending the majority of their time on regulatory matters. This cannot be in anyone’s interests.
“If that continues indefinitely we will crowd out the creativity, innovation and competition which should present the opportunities for growth in the future.”
McDermott said the FCA should be prepared to change its rules if the industry can demonstrate that they are not working and she pointed to a consultation published yesterday proposing removing certain disclosure requirements.
But she added: “The danger is that a sensible and intelligent desire to reduce unnecessary regulation leads the pendulum to swing too far in the other direction.
“We become caught in a loop where we regulate, de-regulate, repeat on an infinite cycle. And if we do that, if we take too big a step back when things are going well then history suggests we will fail to anticipate and prevent the problems of the future.”
