UK Business Secretary Kemi Badenoch Criticizes Regulation Burden in Financial Services, Calls for Balance in Diversity and Growth

During TheCityUK international conference, UK’s Business Secretary, Kemi Badenoch, expressed her concerns about the burden of regulations in financial services. She emphasized the importance of not letting cultural issues hinder growth and highlighted her past experience as a systems analyst at Royal Bank of Scotland. Badenoch has often found herself rejecting what she considers to be bad ideas and has written to UK financial regulators to caution against proposed mandatory ethnicity quotas, which she believes could be counterproductive and unnecessary by law.

One in 10 management roles in UK financial institutions are held by Black, Asian, or other ethnic minority staff, according to major UK investors who wrote to the Financial Conduct Authority (FCA). They advocated for mandatory ethnicity pay gap reporting to promote more equitable workplaces. The FCA is currently seeking ways to enhance diversity and inclusion in UK financial services through consultation.

Badenoch highlighted the shift in regulation from protecting against fraud and systemic failure to now encompassing various aspects such as diversity and green finance. She stressed that an increase in micro management does not necessarily make financial markets stronger. Her opposition to regulations that impede growth reflects her commitment to ensuring that rules in financial services do not hinder progress.