BADENOCH OUTLINES CONSERVATIVE PLANS FOR FINANCIAL REGULATION REFORM

Kemi Badenoch, the Conservative leader, will outline proposals to reform financial sector regulation at the CityUK annual conference on Thursday. She will argue that current regulatory arrangements constrain economic growth and will call for the Financial Service Ombudsman to be replaced as part of a comprehensive overhaul of financial regulation.

Mrs Badenoch will state that the City has been treated as a problem requiring management rather than as a national asset since the financial crisis. She will contend that Government policy over the past two decades has prioritised risk elimination in financial markets. The Conservative Party has identified three specific measures: replacing the Financial Service Ombudsman with a streamlined regulatory process, abolishing the ring-fencing regime that separates banks' retail and investment operations, and adjusting capital requirements for banks. According to Conservative claims, ring-fencing prevents banks from investing in the real economy, and adjusted capital requirements could release £450 billion for investment purposes.

The proposals form part of Conservative strategy to reposition the financial sector's role in economic policy. Mrs Badenoch will argue that the current approach has eliminated not only risk but also reward, opportunity, innovation and growth within Britain's financial industries.