The U.K.'s new prime minister may have big plans for the City of London

As Liz Truss becomes Britain's caller premier curate connected Tuesday, questions are being raised implicit her plans for the U.K.'s historical fiscal territory — the City of London — arsenic the state faces a worsening cost-of-living crisis and the ongoing struggle successful Ukraine. 

The City's regulators could look a large shake-up nether Truss, according to the Financial Times past month. It cited run insiders arsenic saying Truss would question to reappraisal and perchance merge London's 3 large regulators – the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) and the Payment Services Regulator (PSR).

She has besides suggested the Bank of England's mandate will beryllium up for review during her clip arsenic premier minister.

'Change for change's sake'

The FCA regulates 50,000 firms successful the U.K. to "ensure that our fiscal markets are honest, competitory and fair," according to its website. The PRA, meanwhile, oversees the enactment of astir 1,500 fiscal institutions, to "ensure that the fiscal services and products that we each trust connected tin beryllium provided successful a harmless and dependable way."

Their remits dependable similar, but the antithetic organisations were formed erstwhile it was decided the Financial Services Authority, which regulated the City betwixt 2001 and 2013, had aggregate functions that could beryllium amended served done abstracted organisations.

The main goals of the archetypal authorization were bully behaviour and fiscal soundness crossed the sector, according to Matthew Nunan, spouse astatine ineligible steadfast Gibson Dunn and erstwhile section caput astatine the FCA. He said that dividing it into 2 was seen arsenic a mode to springiness those aims adjacent priority.

"The elemental question to beryllium answered present is: What would the rejoining of the PRA and the FCA achieve?", Nunan wrote successful an email to CNBC. 

"If the reply is the reformation of the aged Financial Services Authority, what was the question? Or is it simply alteration for change's sake?"

Governments should ever "challenge the presumption quo," Nunan said, but argued that it's a question of whether this would really amended service the "changing needs of a nation."

"The contented present is that alternatively of articulating a occupation and seeking evidence, the statements made look to beryllium proposing answers to questions cipher is asking," helium said. 

Nunan besides highlighted the quality betwixt regulators and politicians, saying that regulators would "never beryllium allowed" to marque proposals successful the mode that Truss has.

"Regulators are required by instrumentality to marque evidence-based decisions connected regularisation changes [and] necessitate outgo payment investigation earlier they tin beryllium implemented … If that is existent for the regulators, wherefore isn't it existent for politicians?" helium asked.

'Light interaction regulatory regime'

The "battle" to deregulate the banking assemblage is similar "winding the timepiece backmost to pre-2008 planetary fiscal crash," Fran Boait, manager of the run radical Positive Money, told CNBC's "Squawk Box Europe" past month.

It risks the state falling into the aforesaid concern "or a batch worse," Boait said. 

"Liz Truss' connection to merge the 3 cardinal metropolis watchdogs would hazard recreating that airy interaction regulatory authorities – the authorities we had pre-crash," she said. 

She besides highlighted that it has been little than a decennary since the organisations were primitively founded. 

"It wasn't that agelong agone that we acceptable up a overmuch bigger regulatory strategy due to the fact that determination was a statement that determination is truthful overmuch hazard successful the system, [that] complexity successful the fiscal assemblage needs to beryllium decently regulated," she said.

'Lack of clarity'

Discussions of a reappraisal oregon merger of immoderate of London's regulatory bodies stay speculation, arsenic Truss has yet to marque immoderate authoritative statements connected the subject. 

That does origin a "lack of clarity" implicit the aboriginal presumption of the 3 regulators, according to Hargreaves Lansdown Analyst Susannah Streeter.

She said that improving fiscal services for customers should beryllium astatine the forefront of immoderate regulatory discussions.

"Whether they enactment arsenic azygous oregon merged entities, it's truly important that the U.K. has dynamic regulators which marque the astir of Brexit freedoms," Streeter said successful an email to CNBC.

Tackling scams, giving investors much accidental to put astatine IPOs and addressing however accusation is disclosed to imaginable investors should each beryllium connected the docket for immoderate projected changes to the existent regularisation system, she added.