The Bank of England has decided against implementing new diversity and inclusion rules for financial firms, opting instead to support voluntary industry initiatives aimed at enhancing diversity in the sector. This decision is perceived as part of a broader retreat from efforts to advance representation of underrepresented groups, both in the UK and the US, where there has been a rollback on diversity, equity, and inclusion (DEI) policies under Donald Trump. The move by the Bank reflects the current UK government’s stance on reducing regulation to stimulate economic growth.
Sam Woods, a deputy governor at the Bank leading the Prudential Regulation Authority (PRA), stated in a letter that while the PRA recognizes the importance of diversity and inclusion for improved governance, decision-making, and risk management, it will not introduce new regulatory rules in this area. This stance is partly in response to financial firms’ reluctance to see regulators impose further reporting requirements, such as gender and ethnicity pay gap reporting, during a period when the government is simultaneously planning to implement new legal reporting requirements for companies.
Woods emphasized that the PRA and the Financial Conduct Authority (FCA) believe diversity initiatives can benefit firms by supporting both safety, soundness, and the medium to long-term competitiveness of UK financial services. However, the decision comes after an inquiry by the influential Treasury committee into sexism and misogyny in the City of London, which examined progress on the gender pay gap, stigma against working mothers, and the sector’s “alpha male” culture. The committee had previously expressed concerns about the potential imposition of collecting and reporting diversity data by regulators.
This announcement by the Bank and the FCA is aligned with the broader direction set by the government and reflects consultative responses from the regulated entities, aligning regulatory approaches to avoid duplication and unnecessary costs. The decision is in line with calls for UK regulators to support economic growth more actively. It also aligns with a broader international trend, including actions by large US corporations such as Walmart, McDonald’s, Ford, and Amazon, which have either scrapped or scaled back their DEI schemes in response to political changes and economic considerations.
Source: https://www.theguardian.com/business/2025/mar/12/bank-of-england-decides-against-new-rules-on-improving-diversity-and-inclusion
