Former Deputy Prime Minister of Kazakhstan Criticizes Bank of England’s Impact on UK Financial Services and Economy

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Yerbol Orynbayev, a renowned global financial services consultant, has voiced concerns over the Bank of England’s stringent regulations on financial services in the UK. He emphasized that to foster significant economic growth in the UK this year, the Bank of England must alleviate its regulatory burden on financial services.

Orynbayev’s remarks come in the wake of delays faced by Revolut in obtaining its UK banking license. Despite internal expectations for a swift approval, the process has dragged on for nearly three years due to demands from the Bank of England’s Prudential Regulatory Authority (PRA), which has hindered the company’s innovative potential.

The UK economy has been grappling with lackluster performance, notably slipping into a technical recession in Q4 2023, with a contraction of 0.3% in GDP.

Expressing his views, Orynbayev criticized the Bank of England for adopting an overly cautious approach toward modern financial services firms, asserting that such conservatism stifles innovation.

He highlighted the case of Revolut, stressing that a banking license would enable them to enhance their offerings and operate more efficiently in the UK market. However, the prolonged delay in obtaining the license has impeded their ability to innovate and expand their services.

In addition to Revolut, non-bank financial institutions (NBFIs), including insurance firms, asset managers, and pension schemes, have also faced increased scrutiny. The Bank of England aims to regulate NBFIs more proactively amid concerns about their potential impact on the UK’s financial stability.

However, Orynbayev cautioned against punitive measures, attributing the need for increased oversight to policy decisions, such as tax cuts implemented by the government in 2022, which inadvertently exposed vulnerabilities in the financial system.

He urged the Bank of England to reconsider its regulatory stance, warning that reactive measures could stifle the growth of the UK’s financial services sector.

Furthermore, Orynbayev criticized the Bank of England’s cautious approach to interest rate policies, citing comments from Huw Pill, the bank’s chief economist, who suggested that rate cuts are not imminent. He argued that such hesitancy hampers efforts to stimulate economic activity and foster growth.

In conclusion, Orynbayev emphasized the importance of a more proactive and risk-tolerant approach by the Bank of England to unleash the full potential of the UK’s financial services sector and drive post-recession recovery.