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Treasury sets out challenges for the financial services industry

The financial services sector has to meet changing social and economic needs if it is to retain its role in the UK’s economic success, according to a Treasury report.

It says the sector must respond to long-term changes such as an ageing population and the need for basic financial services for everyone in an economy where this is becoming essential. The report says the sector needs to generate flexibility to boost the competitiveness of the economy through its core functions of supplying capital, managing risks and processing payments efficiently.

It highlights the importance of competitiveness, with the Government playing a role through investment in education, skills and infrastructure and reforms to strengthen innovation and enterprise. The Government is working to strengthen the investment chain that connects savers and investors with their stake in UK companies to improve efficiency of capital allocation and raise productivity, says the report.

It holds up the FSA as a successful model which is being followed by other advanced economies but says there will be further reforms to keep the UK at the forefront of international best practise.

Financial Secretary to the Treasury Stephen Timms says: “The global economy is changing rapidly with new technologies, emerging markets and ever increasing competition. UK financial services must respond to these demands and to the pressures and opportunities that they face from new technologies and liberalisation.”

Bloomsbury Financial Planning financial planner Robert Lockie says: “The Government seems to enjoy fiddling about with things other people invented just for the sake of it. Civil servants are not usually the best people to deal with these issues. There needs to be more industry involvement.”

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