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The head of the UK financial watchdog has called for politicians to define an acceptable level of harm to consumers as he warned more would “go wrong” as a result of Sir Keir Starmer’s demands to slash regulation.
Nikhil Rathi, chief executive of the Financial Conduct Authority, said on Wednesday that its recent proposal for easing controls on mortgage lending would increase defaults and repossessions of homes.
“On mortgages, there are more defaults if we relax [rules],” he told the House of Lords financial regulation committee. “One or two things are going to go wrong here and not everybody is going to play completely by the rule book, and is there acceptance of that?”
The FCA has also proposed cutting requirements for banks to check customers’ identities to block money laundering on smaller transactions, after the prime minister called on regulators to propose rule changes that could increase risk-taking and investment in Britain’s stagnating economy.
But Rathi said the change risked leading to a rise in fraud, warning that “there could be more money mules that get through the system”.
This is a developing story
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