Outgoing Financial Conduct Authority (FCA) Chairman John Griffith-Jones has set out four key challenges for his successor Charles Randell when his five-year term in office commences on 1 April.
In a speech to TheCityUK on Wednesday (14 March) Griffith-Jones, who will step down on 31 March after a first term marred by criticism, identified Brexit, technological advances, the relationship between the legal and regulatory process and the relationship between the FCA and those it regulates as the biggest issues facing Randell.
Former Slaughter and May lawyer Randell, who advised ministers on the 2008 financial crisis, was confirmed as the next FCA chairman in January and is scheduled to serve a five-year term.
Randell currently sits on the Bank of England's Prudential Regulation Committee, but his five-year term as a director is set to expire this month.
Commenting on his time in the role, Griffith-Jones said: "From my perspective it has been both a great privilege and an unmissable experience to have played a modest part in moulding the FCA into a fundamental building block of the country's single most important industry.
"I wish everyone involved all the very best, especially Charles as my successor."
Griffith-Jones said Randell faces the challenge of retaining the UK's position as a "financial centre of choice" after Brexit, "ensuring that London can remain a wholesale banking, asset management and insurance market place for all nationalities, safeguarded by a system of sound regulation and established law at least equivalent to the best of the rest".
He added the FCA "will play its full part in making the very best of the hand that gets dealt".
However, Griffith-Jones warned the "noise of politics bumping up against economics makes the long term outcome uncertain".
He said after Brexit the FCA will "need to be there regulating, whatever the outcome", but that it should not engage in any kind of "regulatory race to lower standards".
Griffith-Jones said advances in technology "provide an additional rich source of new issues, use and abuse of data, personalised differential pricing and the power of network effects in promoting dominant players".
He referenced the ongoing debate both in the UK and globally about how best to regulate cryptocurrencies, which "have all the potential of causing consumer harm unless brought within the regulatory perimeter".
The outgoing chairman said: "on the one hand the official sector does not wish to afford [to cryptocurrencies] the status of a currency, but which are being advertised to the consumer as alluring investments on billboards in Canary Wharf."
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