Alongside all the unprecedented changes that 2020 brought us, we also saw the start of three new leadership roles critical to the City of London. At various points through the year Andrew Bailey, Rishi Sunak and Nikhil Rahti all took over roles which will see them shape the direction, policy, and growth of the UK’s financial services sector.
Since their appointments, we can already see that all three have very different leadership styles as a minister, regulatory and central banker respectively.
Bailey has long been held up as the model of an able leader and a safe pair of hands. This is a reputation that has taken some knocks recently with historical reviews being undertaken of the FCA’s handling of the London Capital & Finance investment scandal, putting Bailey’s previous tenure at the helm of the FCA under question.
However, this has not deterred him in his current role of BoE Governor from taking on the EU as the UK seeks to establish its new relationship outside of the bloc. Bailey used his recent Mansion House speech to urge the EU not to pick a fight with the UK over financial services – “We have an opportunity to move forward and rebuild our economies, post-Covid, supported by our financial systems. Now is not the time to have a regional argument.”
How long he maintains his strong-man approach against the weight of the EU will be important, especially given that financial services was marginalised in the text of the final Brexit deal in December, and it is still to be determined what the future long-term UK-EU relationship means in terms of market access and regulatory equivalence.
Rahti has maintained a low profile since coming into office on 1 October. Right from the outset, he said he would prove he’s more than a Treasury mandarin, and that he would be moving forward several transformation priorities – from a strong data and technology strategy, diversity, as well as making sure the FCA continues its consumer protection work.
But Rahti has shown a willingness to share the limelight. He allowed his interim predecessor to take the headline role of this month’s review into unsecured credit and Sir Christopher Woolard to set out the vision of the Buy Now, Pay Later sector’s regulation. This was Woolard’s final act before jetting off to join EY as a partner and lead its financial services regulatory division across Europe.
And finally, there is Sunak. Much has been made of the energic Chancellor’s willingness to turn on the spending taps as soon as the scale of the pandemic’s economic impact was understood in Whitehall. Alongside these proactive and interventionist steps, Rishi is also unusual for having cultivated such a strong personal brand with both business and consumers.
It is easy to overlook that Sunak has only just passed his first anniversary of being the Chancellor. On the whole, he and his team have delivered a smooth communications approach to all of his major announcements and developed a brand to launch commitments deemed good enough to warrant the Chancellor’s very own signature. While some would question the merit of associating so much of the government’s COVID-19 policy with the Chancellor’s personal brand, it does mean Sunak is tying himself to their success or failure. Thus far, it appears to be working well for him, and he is one of the ministers who has best weathered criticism over pandemic management.
This means we need to watch closely how much he gets involved (or not) in the policy debates that will shape the UK’s financial services landscape in the years to come. He has already indicated a desire from the UK Government to “do things a bit differently” in terms of financial regulation. This opens the door to the hope that there are changes to help encourage new and emerging areas of finance, like fintech and green finance; as well as the prioritising of building closer links with financial centres across the world, and not just in Europe.
These three figures will be fundamental to the City’s future success. Whilst evidence shows London continues to hold the top spot for financial and professional services when compared with other major cities we can’t rest on our laurels. We need to push our leaders as well as ourselves to live by a commitment to maintaining our passion for innovation, resilience and understanding that the right policies decisions can unlock a positive future.
Businesses have an important role to play, in helping ministers and regulators develop policies that actually work for them. Complaining once they are made is easy, but U-turns have never been popular. Helping solve the problems while they are the focus of policy makers attention is the key to shaping FS policy that we want to see.