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The House of Lords committee suggests that Britain’s financial regulators should adopt a more open-minded approach like Singapore’s by moving away from their “risk-averse culture” and providing greater support for economic growth, thus becoming more business-friendly.
According to the committee’s report, since the 2008 banking crisis, the Financial Conduct Authority and Prudential Regulation Authority have put in place “unnecessary obstacles” that stifle growth and innovation, ultimately discouraging new businesses from entering the market.
The findings highlight a prevalent dissatisfaction in London’s financial sector about how these authorities have been responding to their new goal of promoting economic growth over the last two years, with a strong belief that the UK can gain valuable insights from Singapore’s financial regulatory strategies.
“Repeatedly, we heard how swiftly the Monetary Authority of Singapore acted—there’s a strong concierge-like culture there,” said Michael Forsyth, the Conservative peer chairing the committee. “We can learn a lot from that,” he mentioned in an interview with the Financial Times.
However, their suggestion to adopt a more business-friendly regulatory style similar to Singapore raises echoes of past Brexit discussions that envisioned transforming Britain into a low-tax and lightly regulated financial hub to compete with the EU.
Despite its limited domestic market, Singapore’s ability to draw in multinational corporations has positioned it as the fourth-highest GDP per capita globally, trailing only Luxembourg, Ireland, and Switzerland—almost double that of the UK, as reported by the IMF.
The committee’s report, which references Singapore 21 times across 139 pages, advocates for the government and regulators to enhance their assessments of the economic effects of financial regulation and to compare the UK against other nations regarding compliance costs and capital requirements.
Globally, politicians are urging regulators to lighten restrictions in the financial sector to enhance lending, investment, and overall growth. Recent plans by the US Federal Reserve suggest a review of post-2008 financial regulations to determine their relevance today.
In contrast, Lord Forsyth cautioned against the extent of deregulation seen during President Donald Trump’s term, describing it as “very dangerous” and “not a path we should take”.
“We aren’t aiming for a race to the bottom or eliminating crucial safeguards,” he emphasized. Instead, the committee is questioning the need for lengthy approvals, such as taking three months to approve an experienced CEO, he noted.
The peers urged the UK’s primary regulatory bodies to collaborate and establish a Singapore-style “concierge service” to assist foreign businesses entering the UK, which would help foster a culture of efficiency and adequate flexibility.
Earlier this year, Sam Woods, the deputy director at the Bank of England leading the PRA, proposed creating such a service alongside the FCA after visiting Singapore to observe how the Monetary Authority of Singapore operates.
The Lords’ report also pointed out that UK regulators are too slow in approving senior executive roles or new business operations. They highlighted the case of insurer Aon, where Singapore approved 18 insurance-linked security applications much faster than the UK managed to approve five, despite this being a British innovation.
The committee has become a prominent critic of financial regulators since its formation last year. Some members have declared interests in financial firms, such as Forsyth’s stake in Secure Trust Bank and Lord John Eatwell’s role as a partner at Palamon Capital Partners.
However, Forsyth asserted that the committee is not biased towards financial services, citing Labour peer Rita Donaghy as a member, who previously served as president of the Trades Union Congress. “We have a diverse group and this report received unanimous support,” he stated.
“Critics might label us as a spokesperson for the City—but they should acknowledge the extent of the investment and job losses stemming from these issues,” he added.
The report echoed warnings from the Association of Foreign Banks, stating that the UK’s senior appointment approval process is “excessively burdensome and often takes too long, especially in comparison to other financial hubs,” discouraging foreign banks from hiring and expanding in the UK.
“There appears to be a disproportionately high compliance cost in the UK,” remarked Forsyth, who transitioned to investment banking after serving as a minister under Margaret Thatcher and John Major.
However, he noted that politicians also play a role in creating “mission creep” for regulators, pushing them into areas like equality and sustainability. “To be fair, some of this pressure on regulators comes from high-level demands imposed by the government,” he concluded.
