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Tyrie: FCA must not be a replica of 'weak' FSA

by Sarah Miloudi on Feb 28, 2012 at 07:48

Tyrie: FCA must not be a replica of 'weak' FSA

The Treasury Select Committee has called for parliament to be given greater powers over new regulator, the Financial Conduct Authority (FCA).

The FCA's accountability must also be greater than current regulator, the Financial Services Authority (FSA), and the committee chaired by MP Andrew Tyrie has urged for the proposed reforms of the regulator to be revisited. 

'The structure and objectives of the FCA will sit at the heart of this new regulatory system. Unless sufficient time is given to getting these reforms right, we could end up, once again, with a defective regulatory framework,' said Tyrie.

Tyrie and his committee want these four key areas of the new regulator's development to be reconsidered:

  • Accountability
  • FCA's objectives
  • Finance Policy Committee's veto over the FCA
  • Cost-benefits analysis

Particularly where accountability is concerned, Tyrie (pictured), said the FCA had been given 'huge powers, but fears these are not enough.

Tyrie said: 'It is not enough, as the Government has proposed, merely to match the weak, pre-existing accountability arrangements of the FSA; they must be substantially strengthened if the FCA is adequately to be accountable to parliament and, through parliament, to the public.

He added: 'It was only as a result of intensive Treasury Committee pressure that the FSA published an account of the UK’s biggest ever banking failure, at RBS. It should not be necessary for the Treasury Committee to engage in such protracted exchanges with the regulator in order to ensure transparency.'

Without a statutory base for parliamentary involvement, Tyrie said 'the temptation will always exist' for authorities to brush matters under the carpet.

'The Treasury Committee, on behalf of Parliament, must have the authority to require retrospective reviews of the FCA’s work,' Tyrie added.


3 comments so far. Why not have your say?

Alasdair Sampson

Feb 28, 2012 at 08:46

I don't suppose that some provision for a fair hearing for IFAs under investigation might be included somewhere too, Mr Tyrie, while you're at it. Oh nothing fancy you understand - just small things...... like the application of the law and the rules, an open mind of investigators, actually looking at all of the evidence and not just that which suits the investigator's purpose, and a Regulatory Decision Oversight Committee that is separate and independent from the FCA and which does not confer with the FCA investigators about the case before it even hears the IFA defendant. Just wee things.

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Jo Kerr

Feb 28, 2012 at 09:14

The acquisition of ABN by RBS and HBOS by Lloyds was done with Government blessing and even encouragement from the highest levels. How would Mr. Tyrie's proposals prevent something similar in the future - THEY WOULD NOT. So let us recognise Mr. Tyrie's proposals for what they are. Political rhetoric to cultivate votes via the well-worn path of banker bashing / anti-business by Comrade Cameron and his cronies.

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Evan Owen

Feb 28, 2012 at 10:22

Dear Mr Tyrie

We await the third thrilling instalment of Leviathan at Large.

And for your information the FSA is an instrument of HM Treasury to whom you report. It is a bit of a daisy chain I'm afraid so this is just a waste of time and effort, might as well catch up with your gardening.

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