Simon: Welcome to Mergerspresso, which today considers the latest developments shaping UK financial services in the time it takes to make your coffee. I’m Simon Wood.

Rosanna: And I’m Rosanna Bryant. Today, we’re talking about the Leeds Reforms, unveiled during July’s Mansion House speech. These reforms are the most significant shift in UK financial regulation in two decades.

Simon: The Leeds Reforms aim to make the UK the top destination for financial services businesses by 2035. At their core, they focus on three key areas: deepening domestic capital markets, streamlining access to capital for smaller firms, and redirecting pension and insurance fund flows into productive assets like infrastructure and housing.

Rosanna: But why now? The Chancellor acknowledged that while post-2008 financial crisis reforms stabilised the system, they also created barriers to innovation and capital deployment. These reforms signal a shift from defensive regulation to a more enabling approach.

Simon: So, what are these reforms? Let’s break it down. One: an incentive for banks to “lend well.” They may hold less capital against socially or economically useful lending, like green mortgages or SME working capital.

Rosanna: Two is fintech. Reduce regulatory uncertainty, so it’s easier for fintech firms to innovate, scale, and list. 

Simon: Three: mortgages. Reshape affordability rules, which have locked many younger would be first time borrowers out of home ownership. 

Rosanna: Four: customer redress. The Financial Ombudsman will return to its original purpose—quickly resolving disputes—rather than acting as a quasi-regulator.

Simon: And finally five: accountability for senior managers. Streamline these rules and reduce costs– but not at the expense of robust governance.

Rosanna: Big picture, these reforms come at a critical time. With global supply shocks, inflationary pressures, and the cost-of-living crisis, structural regulatory reform is essential to restoring investment flows and boosting economic growth.

Simon: It’s a bold agenda but one that could redefine the UK’s financial landscape for years to come. That’s all for today’s episode of Mergerspresso. Thanks for listening.