The PRA and FCA will no longer bring forward proposals to require City of London firms to set diversity targets.
U.K. financial watchdogs today dropped plans to set new rules for diversity and inclusion in the City of London amid a fierce backlash against “DEI” policies under U.S. President Donald Trump.
The Prudential Regulation Authority and the Financial Conduct Authority said in letters to MPs they will not bring forward proposals to require banks, insurers and other financial firms report more data and set diversity targets.
The regulators acknowledged the requirements could be duplicative with other legislation tackling gender and ethnicity pay gaps, at a time when the U.K. government is pushing to reduce regulatory costs for companies.
“We do not currently plan to publish new rules on diversity and inclusion, and do not intend to return to this question until after the substantive implementation of any new legislation in this area,” Sam Woods, chief executive of the PRA, wrote in his letter to Meg Hillier, chair of the Treasury Committee.
U.K. regulators have previously said better representation of women and ethnic minorities in the City can help prevent groupthink and support more effective risk management.
But MPs on the Treasury Committee called for the plans to be scrapped, blasting the data requirements as a box-ticking exercise.
The decision comes as Trump dismantles “diversity, equity and inclusion” policies in the United States, amid a war on “woke,” describing the programs as a “tyranny.” In the U.K., Tory leader Kemi Badenoch and Nigel Farage’s Reform UK have also attacked DEI from the right of politics.
The FCA said it will also take more time to work on its plans to tackle “non-financial misconduct” such as sexual harassment or bullying in the workplace, but will set out next steps by the end of June.
