Citywire for Financial Professionals
Stay connected:

View the article online at http://citywire.co.uk/money/article/a651870

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: FSA left consumers exposed to 'worst scandals' in UK history

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.

6 comments so far. Why not have your say?

SJB

Jan 21, 2013 at 17:02

What amazes me is that Hector Sants has not been called to book and his scandalous management of the FSA has not resulted in consequential penalties. Instead, he's given the laughable job by Barclays of ensuring that staff comply with standards.

If anyone deservers to be pillored, it's Hector Sants!

report this

Alan Tonks

Jan 21, 2013 at 18:03

When are we going to regulate the MPs over their greed and failures, because if anybody needed regulating they do?

report this

Jeremy Bosk

Jan 21, 2013 at 23:15

When are we going to regulate the voters who consistently elect criminal lunatics?

report this

GROSVENOR CHAUNDY

Jan 22, 2013 at 11:43

So long as the Government of this Nation (or indeed Europe) have no power over the FSA (FCA) they will be able to continue there self serving incompetence without fear.

They carry no personal responsibility for actions whatsoever at any level. As Mr Tyrie pointed out - they can do something really stupid - Knowing it to be really stupid - -and they are accountable to no-one.

They have destroyed lives at an individual level and they have destroyed much of what was good about the Financial Services world by removing individual integrity as a governance factor and replacing it with a massive tome of irrelevant and ineffectual rules.

Together with their cohorts on FOS and FSCS they have bullied and brwobeaten the small firm and allowed the true culprits to escape censure of any kind.

The 'Punsihment'? a simple change of name - the same staff - the same lack of accountability. the same rip off bonuses and art work in Canary Wharf.

Bitter and twisted -- who ME?? as if!

report this

Patrick Moore

Jan 22, 2013 at 16:25

As long as Regulators try and regulate for foolish consumers they will always produce complex, robotic systems which allegedly 'capture' the standards and processes which the Reglator feels need to be implemented. These are then used to provide a basis for audit and justifying that the XXX Quango has done its job.

I did read that the FCA was trying to think qualitatively and look at the proposed product and whether it offered value to the 'Consumer'. Thus they would ban anything from being sold, or limit the target market, if it did not offer 'value' whatever that may mean. Consumer protected, job done!

What they are actually proposing is to remove choice from the market and reducing the level of product risk acceptable to individual consumers to a point deemed safe enough to cover the Regulator's backside when the sh1t hits the fan. This cannot be good for competition in the market and stymies the flexibility of consumers to make their own decisions as appropriate to their personal circumstances.

There is no substitute for Caveat Emptor and the only real influence the State can have on it is through basic education. Bailing out incompetent individual consumers is as bad as bailing out incompetent banks. The only common denominator is the fact that the taxpayer/investor ends up with the bill for both.

report this

Jeremy Bosk

Jan 22, 2013 at 16:54

Yes. The nanny state is as big a menace to our well being as the thieves and con merchants of the financial services industry.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire guide to investment trusts

In association with Aberdeen Asset Management

Fund managers from Standard Life Investments quizzed on investment trusts


What can SLI bring to the table for those who want to put their money into investment trusts?

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add noreply@emails.citywire.co.uk to your safe senders list so we don't get junked.

Read more...

Aviva agrees £5bn deal to buy rival Friends Life

by Daniel Grote on Nov 21, 2014 at 18:16

Sorry, this link is not
quite ready yet