• HM Government should conduct a review, after consulting the public fully and 'democratically,' with the aim of developing a set of purposes for the financial system, using the results of this "full and democratic" exercise to change the job descriptions of the Bank of England and the FCA.
• Regulators should identify and support the governance, ownership and business models that can best align the financial system with its "social purpose," whatever that might be.
• Regulators should "add an explicit understanding of social purpose and the value of diversity" to their approach to innovation, including establishing a "diversity hub" for firms with unusual business models.
• Regulators should use ‘regtech’ to concentrate their time and energy on meeting people face-to-face in an effort to understand firms’ culture and business practices 'deeply.'

Anna Laycock, one of the authors, said:  “The combined forces of Brexit and digital disruption give us a once-in-a-generation opportunity to reorient regulation around the ultimate purpose of finance. Yet the experience of the innovators we work with is that regulation often fails to appreciate the huge benefits of models that put people and planet first. If we want to ensure our future financial system delivers for the economy and society, we need new regulatory mandates, rooted in democratic consultation; new metrics that focus on the things that really matter; and a different mindset, embracing fully human-centred regulation. There is no such thing as values-free regulation – only values-blind regulation. Now it’s time to put human values back at the heart of the financial system.

"In this report, we argue for a new regulatory compass: a broad framework which could guide the regulatory system, including the kind of information which regulators ask individual firms to disclose, the way regulators assess  the riskiness of new products or businesses, and the criteria they use  to select businesses for positive support or incubation."

The report starts off well, stating tentatively but correctly that the "system is arguably no more resilient than before the financial crisis." It goes on to mention the word 'purpose' 207 times. The report identifies five 'immediate' purposes that the financial system serves: the creation of money (it is a fallacy to think that most governments create most of their countries' money themselves), the channelling of money, looking after other people’s money, the sharing of risks and the maintenance of transaction and settlement systems.

The report notes: "The volume and complexity of regulation has proven extremely challenging for  smaller...banks to comply with, since they do not have the same economies of scale or large compliance teams. Capital requirements are a particularly good example of how well-intentioned regulation designed around large incumbent banks can have unintended consequences for others. We argue that the Financial Conduct Authority (FCA) should launch a standalone Diversity Hub to complement its efforts to support innovation; likewise, the Prudential Regulation Authority (PRA) should offer additional support (including a sandbox) for firms that bring diversity to the banking sector, including new community and stakeholder banks."