Chancellor Rachel Reeves who confirmed his appointment until September 2030 says Rathi, “has been crucial in this government’s efforts to reform regulation so it supports growth and boosts investment”. 

Reeves adds: “We want the Financial Conduct Authority to go further and faster to deliver this government’s plan for change and we look forward to continuing to work together to achieve this.” 

The Treasury says that the Chancellor and Prime Minister Keir Starmer “set the Financial Conduct Authority the challenge of coming up with ideas to boost economic growth” last December. 

It adds that the regulator has responded with new ideas to “make it easier for people to get on the housing ladder through changes to the rules on mortgages and extra support to help financial services firms start and grow in the UK”. 

Since then, Reeves has pledged to reduce the administrative cost of regulation on business by a quarter over the next five years and merged the Payment System Regulator primarily into the Financial Conduct Authority to cut red tape. 

Last week, the Financial Conduct Authority outlined the first year of its workload as part of its new five-year plan, saying it plans to “bring innovative products and services to market faster.” 

This will include making it easier for firms to gain regulatory approval and use its ‘sandbox,’ to test new products seeking regulatory approval. 

One of Rathi’s most sweeping rule changes since joining the watchdog in October 2020, was the introduction of the Consumer Duty in 2023, which covers the UK’s 60,000 regulated financial firms, including the mortgage industry’s 100 lenders and 18,000 brokers and broker firms. 

The regulator said the guidance aimed to “more rigorously” set out “higher and clearer standards of consumer protection across financial services”. 

Last November, it was reported that Rathi was one of the candidates to become the civil service cabinet secretary, to succeed Simon Case. A role that was filled by Sir Chris Wormald in December. 

Rathi was previously the private secretary to two Prime Ministers Tony Blair and then Gordon Brown, between 2005 and 2008. 

Rathi says: “The FCA does vital work to enable a fair and thriving financial services sector for the good of consumers and the economy.  

“I am proud of the reforms we have delivered to support growth, bolster operational effectiveness, set higher standards and to keep our markets clean and open.  

“While we must go further and faster in this age of volatility, the UK is well placed as a major international financial centre.”   

UK Finance chief executive David Postings adds: “He [Rathi] has delivered a significant amount of reform in his time and engaged constructively with the financial services sector.

“He has also recently been very thoughtful in the debate about how we can get the balance right between risk and consumer protection in our financial system.

“UK Finance looks forward to continuing to work with him and his team to help support economic growth and a competitive financial services sector.”

Rathi’s reappointment is notable at a time when the government is pressing watchdogs to cut red tape to allow firms to grow. 

This has led to several top regulators leaving their posts in recent months. 

In February, Financial Ombudsman Service chief executive Abby Thomas became the fourth head of a regulator to suddenly leave her post.    

This followed former Amazon UK head Doug Gurr being installed as interim chair of the Competition and Markets Authority after Marcus Bokkerink was replaced in January.    

And In November, Homes England chair Peter Freeman and chief executive Peter Denton announced they would resign after being sent a letter by housing minister Matthew Pennycook, setting out higher 2025 homebuilding targets.