The UK government has confirmed its plans to push through with the financial services bill, which will include an ‘intervention power' to overrule the UK's financial regulators, such as the Bank of England.
Despite of concerns among regulators that the proposal could harm the City, new Prime Minister Rishi Sunak, who first proposed the measure while chancellor, has told the Treasury that he wants to move forward.
The Treasury said: "We have confirmed our intention to bring forward an amendment to the financial services bill, to include an ‘intervention power', that will enable the Treasury to direct a regulator to make, amend or revoke rules where there are matters of significant public interest."
Sunak had previously set out his approach in a "Brexit manifesto", talking of a "Big Bang 2.0", where he said that the government "will finish the job of ending the EU system where ultimate power lies with faceless regulators and vest that power in our sovereign parliament".
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The Treasury said the government would introduce an amendment to the financial services bill during the committee stage of its passage through parliament and the chancellor would make the final decision over the specifics of the intervention power.
Jeremy Hunt, the current chancellor, and Andrew Griffith, who was reappointed as a City minister last week, are now in charge of carrying out the policy.
Speaking on Thursday (28 October), Sam Woods, chief executive of the Prudential Regulation Authority and Nikhil Rathi, CEO of the Financial Conduct Authority, cautioned against the measure, which the government still intends to push through with.
Woods warned that the call-in policy would represent "a significant shift away from a model of independent regulation", adding that UK regulatory independence is "the basis for our international credibility".
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The same argument was advanced by Rathi, who said: "It is vital that this independence and agility at speed is not undermined by any proposed call-in power."
Discussing the proposal before the Treasury Committee earlier this month, Andrew Griffith, former financial services minister, said that the policy was necessary as a "safety valve" and would be used "sparingly".
