Global: UK MPs Urge Royal Commission to Review Financial Conduct Regulation

A group of lawmakers in the UK Parliament has called for the establishment of a Royal Commission to review the country’s financial conduct regulatory framework, warning against what they describe as a growing push toward deregulation.

The recommendation was made by the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services(APPG), which recently released a comprehensive 250-page report examining the performance of the UK’s financial oversight system.

According to the report, the current regulatory structure is in urgent need of significant reform, citing a recurring pattern in major financial scandals over the past two decades.

The group argues that many of these cases have followed a similar trajectory: early warning signals are overlooked, regulatory responses are delayed, consumers suffer substantial financial losses, and only limited reforms follow afterward.

The report’s authors contend that this cycle highlights deeper structural weaknesses within the system and caution that government efforts to promote economic growth through deregulation could further weaken consumer protections.

To address these concerns, the APPG is recommending the formation of a Royal Commission tasked with conducting a comprehensive review of the financial regulatory architecture.

Such a commission would evaluate how responsibilities are currently distributed among Parliament, financial regulators, ombudsmen, and the courts, while also proposing reforms aimed at strengthening oversight and consumer protection.

John McDonnell, Labour Member of Parliament, former Shadow Chancellor, and chair of the parliamentary group, said repeated regulatory failures demonstrate that deeper systemic issues remain unresolved.

“Scandal after scandal has been treated as an isolated event, yet the same warning signs are ignored, the same regulatory failures occur, and the same devastating consequences are suffered by ordinary people,” McDonnell said.

“That is not coincidence—it is the product of structural weaknesses in the system Parliament created,” he added.

McDonnell noted that the evidence compiled in the report supports the case for a Royal Commission—or a similar independent inquiry—to undertake a comprehensive review of the UK’s financial regulatory framework and identify long-term solutions.