Britain's business and women's minister, Kemi Badenoch, said on Thursday that the UK financial regulator's plan to force companies to set targets to improve diversity could backfire.
Last September, the Financial Conduct Authority (FCA) and the Bank of England Prudential Regulation Authority (PRA) proposed guidance for financial institutions to tackle sexual harassment and bullying, as well as for major banks and insurers to improve diversity and inclusion. proposed new requirements for setting goals.
“My role as Minister for Women and Equalities is particularly about crushing bad ideas,” Ms Badenoch told a conference organized by financial industry group TheCityUK.
Women in UK financial services earn a third less than their male colleagues: data show
“In some cases, it may be necessary to do something like I did a few weeks ago, writing to the FCA or the PRA to alert them to the proposed obligation on equal quotas.” she added.
Such a requirement “is not required by law and could be counterproductive,” she said.
The FCA said: “We have received the letter and will respond.''
Parliament's finance select committee last month said in its report on 'gender discrimination in cities' that the regulator should withdraw its 'prescriptive plans for extensive data reporting and target setting'.
Instead, regulators should focus on holding company boards and senior executives more accountable for improving diversity and inclusion, the lawmakers said.
The FCA told the committee last month that it reflected the wide range of views it received on setting diversity targets.
Mr Badenoch told the conference that he believed in the “social value” of financial services, that they bring investment and make people's lives better.
“Regulation is moving towards everything from protection against fraud and systemic failure, to diversity to green finance. This growing tide of micromanagement will not necessarily make us or our financial markets stronger. It’s not,” she said.
TheCityUK on Thursday published a report calling for closer oversight of regulators to ensure the financial sector is globally competitive and supports the UK's economic growth.
(Reporting by Hugh Jones; Editing by Barbara Lewis)
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