Both geo- and domestic politics have continued to shape the financial regulatory output for 2024 and will continue to determine the agenda for 2025.
The conflicts in Russia/Ukraine, the Middle East, and US/European relations with China may have diverted attention from or slowed the pace of change in some areas, but they have intensified scrutiny in others, and those conflicts’ potential for wide-reaching impact on financial stability trigger regulatory responses.
The domestic or regional political agenda is also highly impactful on the regulatory horizon – and of course often impossible to disassociate from wider geopolitical forces. In the EU, a look back at crises including COVID and the war in Ukraine leads to a forward-looking agenda focused on building strength and resilience, along with a continued emphasis on consumer protection. Whilst in the UK, the Chancellor’s recent Mansion House speech closely allies the drive for UK competitiveness and growth with the deployment of “international competitiveness” powers given to the FCA and PRA in 2023, signalling that regulators will use their reach to support the new government’s ambitions on economic growth.
The regulated financial services sector will continue to face high levels of new regulation as well as scrutiny on compliance both from regulators and other increasingly active stakeholders in 2025.
It’s not just the volume of regulatory scrutiny that will rise, but also its complexity its pace and its consequence. Attention may come from unexpected directions as risks materialise. A case in point: the FCA progressing its enforcement investigations much more quickly, in the meantime pursuing significantly more supervisory interventions – including imposing wide-ranging requirements – raising the stakes for all firms.
To dive into how these themes and many more are reflected in the UK and EU’s forthcoming financial regulatory agenda for 2025, and look at how they impact upon your sector, read more in our annual Banking, Asset Management and Payments Financial Regulatory Legal Outlook reports.
