Ultimately someone will have to pay for all of the extra hours of work this leads to. “The reality is that the cost of doing that will be paid for by customers,” he warns.
However, rather than roll back this regulatory burden, watchdogs are intent on increasing it.
Before Rishi Sunak called a snap election, Jeremy Hunt broke ranks to attack the FCA over its plans to “name and shame” companies under investigation.
The move signalled that the Chancellor had lost patience with the regulator amid criticism that the FCA was launching too many initiatives and tying businesses up in red tape.
Analysis by free-market think tank the Institute for Economic Affairs (IEA) has found that enforcing anti-money laundering rules alone costs lenders £34bn annually. The IEA noted that this is nearly double the total budget for policing across the UK.
It is not just compliance costs which concern bankers: there are fears the UK’s risk-averse culture has led to a decline in the London stock market.
Pensions funds and insurers increasingly shun investments in shares because of regulations.
Individuals are also turning their back on the stock market: only 11pc of people directly hold shares in the UK, marking a decline of 50pc since 2004.
This has damaged the appeal of London as a home for major businesses. Several companies have quit their primary listing on the UK stock market in recent months including Tarmac-owner CRH, Paddy Power-owner Flutter Entertainment and plumbing group Ferguson. A dearth of new listings has also led the market to shrink.
In April, CS Venkatakrishnan, the chief executive of Barclays who advises shadow chancellor Rachel Reeves, said he wanted to revive the UK stock market’s “risk culture”.
“A lot has to happen to rebuild that ecosystem,” he said. “It has to be people buying stocks, institutions, bank stocks, some aspects of the listing rules. It is reviving that entire chain of providing early stage finance to companies.”
The Barclays chief’s comments speak to a deeper issue: it is not just red tape holding back the City but a cultural shift.
“The treatment of people who invest in equities almost suggests that they need protecting, as if they were buying a car and don’t understand the financing,” says Hall.
“Millions of people seem perfectly happy to gamble in crypto, and that’s an unregulated market. Yet the FCA seems to take the view that you can’t afford to lose money if you invest in equities, but it’s absolutely fine to lose money if you trade crypto. So we’ve got lots of things wrong.”
It is hardly surprising that Britain’s productivity growth has slumped since the financial crisis, Hall says.