Nikhil Rathi said that Chancellor Rachel Reeves “sees the regulatory system as having regulated for risk, not growth. We are engaging seriously with this feedback and will continue to make changes at pace.” 

The leader of the regulator was speaking at the TheCityUK annual conference in London. 

He added: “Take mortgages. I have raised whether the Mortgage Charter – designed for a period of sharply rising interest rates – could be retired. 

“With the Consumer Duty in place, repossessions low, and a maturing risk mindset, do we need this duplicative approach with the added reporting burdens it brings?” 

“As we review the mortgage market, what signal does it send about political risk tolerance if it is retained?” 

Earlier this summer, the City watchdog published a consultation paper on removing overlapping standards, such as the Mortgage Charter, and outdated rules on interest-only mortgages. 

His speech comes a day after the body issued a second “wide-ranging” mortgage review this summer, which it promises will open up the sector to competition to benefit homebuyers. 

Its 72-page Mortgage Rule Review: the future of the mortgage market, includes options on scrapping five-year mortgages, cutting the 1% minimum stress test margin and widening the use of later life lending.  

But Rathi added that opening up the home loan market, and other areas the body covers, comes with risk. 

He said: “I have consistently called for an open debate on risk appetite — and metrics for tolerable failures, alongside ones for competitiveness and growth, and operational performance — to ensure we shift to a stance that endures.”

The watchdog has made several changes and launched a series of consultations since, Prime Minister Keir Starmer and Rachel Reeves wrote to a range of regulators last November, asking them to loosen rules that will allow economic growth, particularly within the UK’s financial sector.