Speech by Ashley Alder, FCA Chair, at the Investment Association Annual 2025 Conference: Scotland.
It can’t have escaped your attention that a dominant contemporary theme for UK regulators is to do with our contribution to economic growth and UK competitiveness. And it’s not surprising that there have been some fairly intensive debates around this question ever since our secondary objective went live in 2023. Different viewpoints have centred on apparent trade-offs between growth and our consumer protection objective, and between growth and system resilience. Many have also pointed to successive cycles of regulatory tightening – usually in response to a financial crisis – which were then followed by periods of relaxation as memories fade and economic priorities change…until the next crisis.And back in February, the chair of the Treasury Select Committee, Dame Meg Hillier asked a fair question: ‘Rhetoric and vested interests aside, where is the proof that stripping away financial services regulation will generate meaningful growth?’ All of this set the scene for our new 5-year strategy published in March. The strategy is absolutely explicit about the connections between what the FCA does as a regulator and positive economic outcomes. For example, greater financial security for an aging population, fostering innovation and, for younger people, the ability to get onto the housing ladder. We were also clear about the trade-offs that must accompany the choices we make.This focus on regulation for growth is also happening amid a period of radical secular change, of a type which feels unprecedented and which, as a regulator, we must take into consideration.The risks and benefits of AI, distributed ledger and other technologies are all part of the daily conversation. And we can add to this heightened geopolitical and security risks as well as the short- and long-term effects of climate change. Now we could dwell on these issues all day. But for now, I would point to the fact that all of us are facing into at least 3 big themes:Low growth and productivity on the domestic front.Technology revolutionising how we operate in our business and personal lives. A challenging geopolitical environment requiring rapid adaptation. And we don’t underestimate the implications of all of this for your industry. After all, UK asset management is a world leader, influencing the allocation of vast pools of domestic and international savings. This fact has not been lost on policy-makers who, understandably, are keen to redirect more of the savings that you manage into domestic investment. That brings me to one of the main headlines with which we introduced our new 5-year strategy. This was 'rebalancing risk', intended to signal that in any market economy, risk is not to be avoided but is essential for fostering investment and innovation. 'Risk’ is, however, far from a straightforward concept. Effective management and understanding of risk spanning different markets and different participants – ranging from the sophisticated to the vulnerable – is critical to the healthy development of the financial system. It also underpins our work around more proportionate regulation as a smarter regulator.