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Britain may see a turnaround in its economic fortunes as a leading think tank suggests a shift towards embracing more risk to spur investment growth. New Financial’s analysis of the financial sector since 2014 highlights a culture of risk-aversion that has permeated the wider economy, stifling investment opportunities.
The think tank’s report indicates that the UK has lagged behind the United States in various financial metrics, attributing this to a cautious regulatory approach post the 2007-2009 credit crisis. It advocates for a recalibration of risk appetite, arguing that enabling investors to take on more risk could fuel investment and drive economic growth.
While acknowledging the challenges faced by regulators like the FCA and PRA, New Financial calls for a reassessment of regulatory practices to encourage risk-taking without the fear of failure. It also urges the new government to streamline regulations, redefine growth objectives, and avoid political interference in regulatory matters.
The FCA has welcomed the feedback, emphasizing the need for a dialogue on shifting risk appetite to support competitiveness in the financial sector. Overall, the report underscores the importance of fostering a climate that encourages risk-taking to invigorate investment and drive economic prosperity.
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SOURCE
Emma Collins, graduated in Financial Economics from the University of Chicago in the USA in 2016. She has since worked at an asset management firm in New York, where she specializes in investment strategies and portfolio management. Emma has a keen interest in financial analysis and has published several articles in renowned financial journals. Her work focuses on providing actionable insights to investors, and she is known for her forward-thinking approach to managing financial portfolios.
