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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: The UK Chancellor Rachel Reeves meeting with the Treasury Secretary

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Speaker 2: Scott Besson at the IMF as countries lineup to strike

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Speaker 2: trade deals with the United States. Corporates and regulators looking

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Speaker 2: for clarity as President Trump shifts the global economic landscape.

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Speaker 2: Joining us now to discuss Nicole Rathie, the CEO of

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Speaker 2: the Financial Conduct Authority, a financial watchdog which wallishes over

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Speaker 2: forty thousand businesses in the UK. Nicol Welcome to the

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Speaker 2: program sir, and sorry to miss you. You're up in

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Speaker 2: New York. We're down in Washington, d C. We cross

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Speaker 2: passed I think in the last forty eight hours. I

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Speaker 2: want to start with the nature of this shark and

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Speaker 2: what it means to you personally and for the institution

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Speaker 2: and ultimately for the UK. Nicole, this is a policy

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Speaker 2: shark across many dimensions. Does it have the potential to

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Speaker 2: morph into a financial shark as well?

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Speaker 1: Morning, Jonathan. What we've seen over the last few weeks

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Speaker 1: has been extraordinary volatility, record trading volumes in London. We

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Speaker 1: oversee a huge global financial center with asset classes ranging

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Speaker 1: from commodities, equities, fixed income and what you've seen is

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Speaker 1: actually the financial markets staying resilient you heard that from

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Speaker 1: aDNA just now, and coping with the changes in the

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Speaker 1: external environment and seeking to find the price. And that

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Speaker 1: is what we're focused on as regulators, making sure market

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Speaker 1: integrity is maintained and the markets are functioning and preventing

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Speaker 1: what you asked about, which is a policy shock turning

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Speaker 1: into a financial shock.

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Speaker 2: Nikko. One word we've heard repeatedly over the past few weeks,

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Speaker 2: and I'm sure you've heard the same word as orderly.

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Speaker 2: Things have been orderly. When I think of certain vulnerabilities

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Speaker 2: in the UK, my mind often shifts to the UK

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Speaker 2: housing market. What is the positioning of the housing market

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Speaker 2: at the moment? And you think now is a good

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Speaker 2: time to reconsider whether to lighten up some of the

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Speaker 2: stress tests on say, mortgage applications in the not too

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Speaker 2: distant future.

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Speaker 1: You're right, market conditions have been orderly, and I think

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Speaker 1: that's testament to all the work that's gone in over

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Speaker 1: of years on operational resilience, on liquidity, on capital and

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Speaker 1: on data and vigilance in the markets to make sure

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Speaker 1: that we do keep things orderly in these periods of

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Speaker 1: extraordinary volatility, and the same applies to the housing market.

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Speaker 1: We've seen a very significant shift in the interest rate

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Speaker 1: environment in the UK like in other countries around the

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Speaker 1: world over the last few years, but the housing market

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Speaker 1: has held up. Our repossessions are actually lower than pre

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Speaker 1: COVID and we're seeing continued resilience in consumer balance sheets,

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Speaker 1: and therefore we think it is appropriate for us have

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Speaker 1: a discussion in the UK about how we support first

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Speaker 1: time buyers access home ownership. A lot of people are

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Speaker 1: paying high rents in cities around the UK and that

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Speaker 1: isn't great for their long term financial well being, and

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Speaker 1: so that's why we've moved in that direction as part

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Speaker 1: of our overall push to support growth in the economy

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Speaker 1: in the UK, which is obviously an urgent need.

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Speaker 3: Nikkil there are two sides to this, and one, how

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Speaker 3: do you could say that the resilience of the global

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Speaker 3: financial system is the result of some of these regulations

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Speaker 3: and stress tests. On the other hand, you could say

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Speaker 3: that maybe some of these consumers don't have access to

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Speaker 3: maybe as easy credit because of how regulated some of

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Speaker 3: the financial institutions are. Are you pushing back against what

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Speaker 3: we're hearing globally in particular in the US, saying let's

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Speaker 3: remove some of the regulations that maybe are too stringent

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Speaker 3: on the financial sector.

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Speaker 1: We've had great conversations here in the US this week.

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Speaker 1: I had the pleasure of meeting Chair Atkins shortly after

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Speaker 1: he was sworn in, and I'm meeting a number of

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Speaker 1: my other US counterparts, and I think on the whole

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Speaker 1: agenda of growth, innovation, competitiveness, I think we're aligned. And

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Speaker 1: this conversation is happening in the US, it's happening in

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Speaker 1: the UK, it's happening in the European Union. We have

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Speaker 1: significantly improved standards of capital and liquidity. In the UK,

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Speaker 1: We've raised standards of consumer protection with our Consumer Duty

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Speaker 1: and it's right having done that to make sure that

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Speaker 1: the regulations are fit for purpose, for the needs of

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Speaker 1: the future and what the economy needs right now. And

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Speaker 1: I think we've we're moving very fast after putting around

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Speaker 1: fifty proposals to our Prime Minister at the start of

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Speaker 1: the year to implement those simplify our rules whilst maintaining

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Speaker 1: consumer protection and marked integrity.

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Speaker 3: Well, I guess another way to frame this is in

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Speaker 3: the years after two thousand and eight, there was a

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Speaker 3: steady march toward tightening financial restrictions on banks, and we've

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Speaker 3: seen as a result of that financial institutions lose businesses

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Speaker 3: to private ones and a whole host of other transformations.

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Speaker 3: Are we going to see some modicum of reversal of that?

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Speaker 3: Are we going to see going forward walking back of

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Speaker 3: some of the regulations around major financial institutions around the world,

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Speaker 3: not just in the United States, but also in the

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Speaker 3: UK and EU.

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Speaker 1: I think you will see a recalibration, and we're well

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Speaker 1: underway with some of our significant reforms in the UK

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Speaker 1: on capital markets. We've put through some of the most

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Speaker 1: far reaching reforms to our listing rules in the last

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Speaker 1: year or so. We're reforming the rules around prospectuses. We're

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Speaker 1: transforming the way advice is provided in the UK so

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Speaker 1: that our pension system is better able to provide capital,

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Speaker 1: infrastructure and scale up companies. We're also though a global

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Speaker 1: financial center, and we want to make sure that our

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Speaker 1: markets serve all needs. So I don't see this as

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Speaker 1: a opposition between banks and non banks. We want businesses

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Speaker 1: of all sizes to be accessing the capital they need,

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Speaker 1: equity or debt from public markets, from private markets, from banks,

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Speaker 1: and the important thing is to make sure that all

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Speaker 1: are well regulated and that we have the data we

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Speaker 1: need to monitor and make sure the risks are well managed.

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Speaker 4: Across multiple policies. Really, this White House Washington is setting

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Speaker 4: the gender for the rest of the world. Are you

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Speaker 4: concerned at all for race to the bottom when it

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Speaker 4: comes to deregulation.

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Speaker 1: That's not the message I was getting from my US

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Speaker 1: colleagues this week at all. There isn't an energy here

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Speaker 1: around regulatory reform, for example in the area of digital

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Speaker 1: assets and stable coins, but also a commitment to making

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Speaker 1: sure we have high standards of integrity. I think Chair

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Speaker 1: Atkins said and his statement when he was appointed that

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Speaker 1: he's committed to secure markets in the US. We have

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Speaker 1: a very deep relation relationship with our US capital market counterparts.

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Speaker 1: We share considerable amounts of data, and we work really

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Speaker 1: closely together on market developments on enforcement. So, for example,

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Speaker 1: in recent weeks, we've seen significant volatility in sovereign debt

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Speaker 1: markets and in bond markets. There's been a significant rise

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Speaker 1: in HEDGEMND participation in those markets. We're talking about those

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Speaker 1: issues and making sure we have a good mutual understanding.

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Speaker 4: You are the first head of the Authority to actually

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Speaker 4: get a second five year term. What do you hope

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Speaker 4: to achieve in the next five years.

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Speaker 1: Our Prime Minister has talked about rewiring the state in

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Speaker 1: the United Kingdom so that we are digitally enabled and

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Speaker 1: fit for purpose for the rapidly changing technological environment we

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Speaker 1: are living in. And I think that applies to regulators too,

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Speaker 1: And we have, obsee one of the world's largest financial centers.

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Speaker 1: We want to be open to business to participants from

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Speaker 1: all over the world. That's based on high standards, and

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Speaker 1: we want to move fast on embracing new technology too

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Speaker 1: and forging you know, deep deeper relationships with all of

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Speaker 1: our key trading partners. So I think you'll see us

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Speaker 1: moving very fast now on regulatory reform and seeking to

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Speaker 1: make sure that we are right at the cutting edge

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Speaker 1: of these new technological shifts.

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Speaker 2: Nickil, thanks for sharing some time with us this morning.

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Speaker 2: We appreciate it. A busy morning for you, I'm sure

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Speaker 2: in New York City. Nicol Rathi there, the CEO of

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Speaker 2: the Financial Conduct Authority