Postings cited the example of how changing regulation of defined-benefit pension funds had incentivised funds to abandon equities and invest in bonds, which provide a more reliable stream of income.
Leading City figures have reignited calls to policymakers to embrace risk or watch the UK’s financial system lose out to rival markets around the world.
“The thing we’ve got to guard against is avoiding any form of risk,” David Postings, chief executive of UK Finance, told City A.M.
“If we’re going to be truly competitive, this has to be an environment where there’s strong regulation, the benefit of English law, great people and great infrastructure, but also an ability to make a decent return and to take risk,” he said.
Postings cited the example of how changing regulation of defined-benefit pension funds had incentivised funds to abandon equities and invest in bonds, which provide a more reliable stream of income.
Palmer said that constant tinkering with regulation to prevent bad outcomes was having a real-world impact. “Reconfiguring the rules endlessly is adversely impacting productivity growth and substantive outcomes,” he said.
Alasdair Steele, a corporate partner at CMS, told City A.M. that the UK has been “largely ‘risk off’ since the financial crash”.
This then puts pressure on stakeholders to prevent further failures, which limits the potential upsides that investors can receive....
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