The Financial Conduct Authority has promised “bold strokes” and a faster pace as it cuts red tape, adding that the watchdog does not anticipate more “mass redress events”.  

The regulator’s chief executive Nikhil Rathi said that following his letter to the Prime Minister last month to aid the UK’s drive for growth, the body would, “streamline our work. End duplication”.

He was speaking at an Association of British Insurers roundtable this morning. 

Rathi said his letter to Keir Starmer included “50, or so, growth proposals” covering “mortgage affordability, digital payments, removing redundant data returns, supporting international promotion of UK financial services, opening up to more innovative firms and cutting barriers between regulators”. 

The FCA’s mortgage plans cover: 

• Simplifying responsible lending and advice rules for mortgages, supporting home ownership and opening a discussion on the balance between access to lending and levels of defaults 

• Consulting on removing maturing interest-only mortgages and other outdated guidance 

• Removing overlapping standards, such as the Mortgage Charter 

Rathi said the push for growth was an “urgent problem requires bold strokes – from all of us”. 

The head of the regulator said he had asked for greater clarification on the “government’s risk appetite – particularly in relation to consumer harm”. 

Rathi appeared before the House of Lords financial regulation committee in January and called on the government to lay out an acceptable level of mortgage defaults, currently at around 1,000 repossessions a quarter, if home loan rules were relaxed. 

Today, Rathi addressed the financial services industry: “We would value metrics against which we can be held to account. And in turn, which can help give you the predictability and certainty you need. We hope you will engage in this debate too.” 

He added: “But I know our ability to take these bold steps rests on a different, more trusting, approach between regulator and regulated.”   

The watchdog head said that its work over the next five years, on which he will give further details next month, would involve fewer wholesale changes.  

Rathi said: “We also heard concerns around the pace of regulatory change, and are aiming for fewer large-scale changes in our next five-year strategy.” 

He pointed out that the body had removed its expectation that firms should appoint Consumer Duty board champions.  

He said: “From this morning, boards can decide for themselves whether or not to have one.” 

The regulator’s Consumer Duty wide-ranging guidance, introduced in 2023, covers the UK’s 60,000 regulated financial firms, including the mortgage industry’s roughly 100 lenders and 18,000 brokers and broker firms.  

It tasks firms with “fundamentally improving how firms serve consumers” by setting out “higher and clearer standards of consumer protection across financial services”.  

But Rathi added: “I want to be clear: being serious about growth does not mean a diminishing focus on our primary objectives.   

“The ability of consumers to access the right products for them – good quality, fair-value products – when they need to is central to our purpose. 

“Since we brought in the Consumer Duty, we’ve seen real improvements in product oversight and governance.” 

The watchdog added that it was waiting on the Supreme Court’s decision on the motor finance case on hidden commissions between lenders and dealers, which has seen banks set aside hundreds of millions to cover potential claims. 

Rathi said: “Subject to their timetable, we hope we can provide clarity on any redress mechanism by the end of this year.” 

But he added: “We are not currently anticipating any further such mass redress events.” 

Many critics fear motor finance mis-selling could rival the payment protection insurance saga, which was Britain’s costliest and longest-running consumer scandal.  

As many as 64 million payment protection insurance policies were sold in the UK – mostly between 1990 and 2010, and some as far back as the 1970s – alongside loans, mortgages, credit cards and other deals.  

This scandal, which sold insurance that was hard to claim and often not needed, cost banks around £50bn.