According to a keynote speech by Kate Collyer, the Chief Economist of the Financial Conduct Authority (FCA), the UK’s financial sector has experienced a productivity rut for the past decade. She made these remarks at the Warwick Business School, discussing financial regulation’s role in supporting UK growth. She highlighted the disappointing economic growth since the financial crisis.
Collyer, the FCA Chief Economist, noted that various methods can measure productivity. However, no matter the method, the outcome remains the same – a significant productivity slowdown. The UK’s financial sector isn’t growing at the necessary rate to meet the nation’s economic needs.
She emphasized the need for risk rebalancing to spur innovation and growth during her speech. She conveyed that the sector should lessen its excessive focus on risk aversion and adopt a more balanced risk-taking approach. This shift could be crucial in sparking innovation and stimulating much-needed sector growth.
Embracing Risk to Drive Innovation
Collyer proposed that a more balanced risk approach could cultivate a more innovative culture within the financial sector. She stressed the sector’s need to innovate and adapt to the economy’s evolving needs, something that has been glaringly absent in recent years.
Adopting a balanced risk approach could unlock numerous innovation opportunities. Consequently, this could boost productivity and contribute to a stronger, healthier economy.
The Chief Economist’s speech was a clear call to action for the financial sector to reassess its risk approach. A change in mindset could trigger a resurgence of growth and innovation within the sector, addressing the decade-long productivity issues.
This bold statement from one of the nation’s leading economists offers the UK’s financial sector much to consider. The industry must now determine how to adapt to this new approach and utilize the potential benefits it could yield.
