The head of the Financial Conduct Authority said it is “working hard to make the UK the best place in the world to do business.”
Chief executive Nikhil Rathi added: “We don’t just make the rules, we help shape the ecosystem and long-term risk appetite that firms operate with.”
The head of the City regulator laid out the agenda of the watchdog over the rest of the year and beyond at the annual conference of the Association of Corporate Treasurers yesterday.
However, his speech comes as the watchdog has locked horns with the City and the Chancellor over its proposals to ‘name and shame’ companies under investigation.
Last week, the body promised to “engage further with industry” over the plan, which it believes is in the public interest.
However, earlier this month 16 City groups said the plan could hit the valuations of firms and “destabilise financial markets”. Jeremey Hunt urged the regulator to “re-look” at its proposals.
In a wide-ranging speech last night, Rathi said the FCA would “always take a pragmatic approach”.
Last year ministers gave the body a secondary objective to help boost UK growth and lift the international competitiveness of the British economy over the medium to long-term.
To that end, the FCA head said the body was looking at standards for crypto, AI and other areas.
Also, he added that net lending from non-banks has jumped by around £425bn over the last 15 years.
Rathi pointed out: “Much of the growth has taken place while interest rates have been low. Consequently, vulnerabilities could be exposed by the adjustment to higher interest rates and the changing macro-financial environment.
“For example, private finance valuations have been under pressure, and financing and exit routes have become more difficult.
“I have made clear that the answer isn’t to reach automatically for the regulatory cudgel. And I would like to see more evidence before we declare we have a systemic issue in the private finance sector.”
The regulator said it is currently supporting the Bank of England with its stress testing on banking exposure to private equity risk.
Rathi added that the FCA is doing its own work on valuation practices in the fund industry, which will include “a multi-firm review examining valuation practices for private assets,” that will run until the end of the year.
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