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MPs: FSA left consumers exposed to 'worst scandals' in UK history
The FSA has been taken to task by MPs over its failures, while the new regulator has been warned it must do better.
MPs have slammed the Financial Services Authority (FSA) for ‘failing consumers’ and warned the incoming chairman of the new regulator that he must do better.
A report by the Treasury Select Committee has laid out the failings of the FSA which it said ‘left consumers exposed to some of the worst scandals in UK financial history’. It also said the FSA ‘created a box ticking culture whose benefits were far from evident and which still failed to pick up major failures in the making’.
The Committee said John Griffiths-Jones, chairman of the FSA’s successor the Financial Conduct Authority (FCA), must adopt a ‘radically different approach’ to ‘restore the credibility’ of the regulator.
The Committee goes on to criticise the board of the FSA, which includes recently knighted chief executive Hector Sants, for failing in its oversight of the organisation.
Andrew Tyrie, chairman of the Committee, said: ‘The FCA is taking over from a body, the FSA, which failed consumers badly. If the FCA simply picks up where the FCA left off, consumers will suffer again.
Tyrie urged Griffith-Jones to ‘develop a markedly better culture’ than within the FSA and set up a more effective board.
‘His actions will speak as loudly as his words,’ said Tyrie.
This year the FSA will be split into two separate bodies, the FCA and the Prudential Regulation Authority (PRA).
The PRA will have responsibility for overseeing the stability of banks and big financial institutions and will form part of the Bank of England. The FCA will supervise the activities of all other financial services firms.
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