Policy Exchange, a London-based conservative think tank, has called on the government to merge existing financial services regulators in a new report.

The organisation says that meeting the demands of the UK’s multiple financial regulators can be a “major barrier” to innovation and new market entrants, who do not have as much resource as larger, well-established firms.

It argues that fewer, bigger regulators in key areas like the UK financial sector would mean greater “democratic accountability for regulatory outcomes”, both in terms of the protection of the public and the cost of regulation.

Policy Exchange claims that the sheer number of regulators operating in certain sectors, including financial services, brings challenges of managing the risk of “overlaps, duplication, or inconsistency in regulation”.

The UK's largest financial services regulators are the Financial Conduct Authority and the Bank of England's Prudential Regulation Authority (PRA). Other regulators, including the Competition and Markets Authority (CMA) and the Payments Systems Regulator, also play a role in the regulation of the industry.

FStech has approached the Treasury for comment on the report.

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