The economic secretary to the Treasury has said the FCA must transform into a “more nimble and innovative” regulator.

He made his comments in a speech to the UK Finance trade body Annual Dinner this week.

Mr Glen urged the FCA to remain, “on the front foot in the face of rapid innovation, and a digital age”.

He added that the government and financial services industry must look at the regulatory framework and, “challenge ourselves on how to ensure it is fit to deliver what we now need.”

In his speech he said that while the “landscape is much clearer” after leaving the EU’s institutional framework, regulators needed to take advantage of the new freedoms to “refresh the UK’s position as the world’s pre-eminent financial centre”.

He said: “We need a regulatory framework that is more agile and more responsive than we have ever had before. That avoids politicisation and posturing but gives decision-making to the independent and expert regulators, so that we can regulate better, more quickly, more flexibly. To my mind, it is a completely false choice to say that we have to choose between high standards or greater competitiveness. We need regulators who think carefully about both"

He added that while regulation should have some flexibility, the FCA should be careful not to change the rules too often.

He said: “Of course it should be able to evolve and that doesn’t mean endlessly tweaking rules with limited benefit. But it should mean regulators having the self-confidence to ask themselves whether they have got the right balance, whether there are any unintended consequences of what they have done, or whether they are placing too great a burden on firms trying to do the right thing.”

He called on the FCA, and other financial regulators, to establish a more interactive rolling dialogue with the industry.

He said: “Yes, of course, regulators must be free to take action – and sometimes fast action – to tackle bad apples and get them out of the market. But they should also work collaboratively with industry, to understand their often new business models, and to foster innovation and technological transformation safely and responsibly.”