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MPs demand veto on who runs City watchdog

Andrew Tyrie, chairman of the Treasury Select Committee, calls for MPs to get veto on the appointment of Financial Conduct Authority boss.

MPs demand veto on who runs City watchdog

Andrew Tyrie, chairman of the powerful Treasury Select Committee (TSC), has called for MPs to be given a veto on the appointment and dismissal of the boss of the Financial Conduct Authority (FCA), one of two main watchdogs overseeing the City of London.

Tyrie (pictured) wrote to the Treasury asking for the powers following the appointment of Andrew Bailey as FCA chief executive yesterday. Bailey is moving across from the Prudential Regulation Authority (PRA) which he has headed since its creation by the coalition government.

The TSC previously called for a veto on regulatory appointments when it published a report into the regulator in 2012.

At the time it was told this would not be possible due to the market sensitivity around the appointment of the regulator's head.

However, Tyrie has reiterated his call after Bailey’s appointment. He said concerns about the regulator’s independence from government pressure following the dismissal of former chief execuitive Martin Wheatley in July, as well as dropped reviews into banking culture and incentives.

‘Allegations have been made that the FCA has been vulnerable to political pressure, influencing the way that it approaches the fulfilment of its statutory obligations. Whatever the substance of these allegations, and there may be none, the perception of them may remain,’ Tyrie said.

‘It is partly the need to address these concerns, and to entrench the FCA’s independence, that has led the Committee to conclude that it requires a veto on both the appointment and the dismissal of the FCA’s senior leadership.’

The TSC currently has the power to veto senior appointments made to the budget monitoring body the Office for Budget Responsibility (OBR).

In a letter chancellor George Osborne, published on the TSC’s website, Tyrie asked for this power to be extended to FCA and PRA chief executive appointments.  

‘The TSC would welcome assurances that you will put in place a similar veto [to the OBR] on the appointment and dismissal of the chief executives of the FCA and PRA,’ he wrote

‘If there is no immediate legislative opportunity to do so, a first step would be a personal assurance that you will not make an appointment or decision on an incumbent without the prior agreement of the committee.’

3 comments so far. Why not have your say?

Franco Bristolian

Jan 27, 2016 at 17:08

Clearly, it is unsatisfactory for an obviously-partisan Chancellor of the Exchequer to have the power of appointment to, and in effect dismissal from,

such a critically-important post. I'm not clear, however, that there would be much advantage in giving veto powers to a Committee controlled by obviously-partisan members of the majority party in Parliament. Would their choice be any more 'independent'?

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Jan 27, 2016 at 17:42

Spot on Franco. It is simply a matter of transferring controlling authority from one individual whose credentials to make such decisions are suspect, to a group of individuals whose credentials to make such decisions are even more suspect. It is akin to a group of first year undergraduates being given the power to veto the appointment of a Professor Emeritus, which will also no doubt come to pass in our Alice in Wonderland world of the public sector.

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Frank Frank

Jan 27, 2016 at 21:00

The top people in this government are up to their necks in the financial sector and depend on it for hugely paid consultancy jobs and directorships when they retire from politics. Does any one really think they will ever do anything other than that industry's bidding?

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