In building a strong foundation for the Rutanian economy, financial sector reform is rapidly becoming the yardstick of success. For much of the past century, Rutania's financial services sector has been allowed to languish under outdated regulations and have operated within the sector without proper regulation/scrutiny amidst roll-backs by previous political administrations. This, coupled with the collapse in consumer savings, has contributed to the relatively unstable nature of commercial and investment banking within Rutania. Although the nation is expected to experience economic growth as a direct result of movement in the economies of Barrymore, North Glenshire, Ardern and Garraway, for Moorland the province's economic recovery is directly tied to long-term efforts in the financial services sector among others. Rutania's financial system—which is comprised of numerous commercial, private and investment banks—is becoming an extremely important determinant for the nation's economic development trajectory. Financial policy experts point to the importance of private investment and savings in supporting short, medium and long-term investments by the nation's entrepreneurs as they note that in many instances, a lack of funding acts as a clear disincentive to entrepreneurs and thus contributes to low growth. In its annual report on Financial Stability, the Central Bank of Rutania notes that although growth is occurring in many other sectors, the multiplier effect on the financial services sector could be dampened without proper regulation and strict adherence to financial conduct. To this extent, the Central Bank has noted that it intends on conducting stress testing for financial institutions within Rutania, noting that the relative "weakness" of the banks within their current environment creates a sense of unease among investors and financial analysts as to the sector's ability to withstand external shocks. Given the importance of a strong financial services sector to national growth, two new appointments have been made to address the situation. Lord Chancellor Elizabeth Baird appointed Secretary of State for Financial Services and Markets Abigail Thompson and Governor of the Central Bank of Rutania Dr Harrison MacLennan appointed Oscar Cook as Inspector of Financial Institutions. According to the Lord Chancellor, Secretary Thompson's appointment comes as a direct result of her experience in the financial services sector having worked as a Senior Compliance Officer within the Central Bank of Rutania.
Speaking to members of the media following her appointment, Secretary Thompson lamented that a holistic transformation of Rutania's financial services sector was evident. Pointing to numerous priority areas as it pertains to reform, she explained that the sector should expect numerous disruptions as the government changes the very foundation upon which the sector was built on. She pointed to the importance of an independent financial services regulator, noting that although the Central Bank had done yeoman services in terms of supervising the relative stability of the sector, there was a need for more detailed/meticulous focuses on the operations/activities of financial institutions. "Without a doubt, the Central Bank has done the nation well in continuously monitoring the sector from a macroscopic perspective (i.e) providing updates on the stability and outlook of the sector, however as we've seen in other territories the Central Bank is not equipped, be it legislatively or operationally, to provide the type of regulation we'd like to see in the sector. We need an independent financial regulator, on par with the Central Bank and the Securities Exchange Commission, in terms of its powers." To this extent, Secretary Thompson has stated that she intends on working closely with sector stakeholders in creating an independent financial services regulator for Rutania. As a subordinate of Lord Treasurer Dr Arran Singh, Secretary Thompson explained that fiscal policy reforms would also have to be considered. She explained that she intends on expanding on Dr Singh's existing work with fintech with the hopes of utilising technology to bridge the gap between the bank and the unbanked. During his most recent state of the economy update, Dr Singh stated that the informal economy remained an extremely important issue for the central government. Amidst the jumpstart of economic activity throughout the nation, transactions within the informal economy have been at an all-time high, with the Rutanian Revenue Authority estimating that the government is losing out on billions of dollars in potential tax revenue. "The Lord Treasurer has expressed his intention of addressing the issue that is the informal economy. Whilst I cannot speak to the jobs crisis within that sector, I can speak to how we can bring people back into the formal economy. E-commerce solutions allow for those in the formal economy to contribute to national growth via taxation from e-commerce transactions. Businesses within these sectors will soon be mandated to conduct their business via e-commerce/e-payment platforms. As it pertains to cleaning up the black market developing in the informal economy, I believe that harsher penalties are in order," Secretary Thompson posited.