A committee is likely to be set up to co-ordinate communication between UK regulators and European supervisory authorities.
In guidance on the Financial Services Bill, published last week, the Treasury says although previous arrangements enabled a committee to be set up if regulators felt in necessary, the Government now wants it to be mandatory.
It says: “The bill has been amended to require that the international memorandum of understanding establish this committee. The committee will report to the Chancellor, be chaired by the Treasury and include members of the FCA, the PRA and the Bank of England.”
In December, the joint committee on the draft Financial Services Bill expressed concerns that the UK regulators will not “speak with one strong, unified voice” due to the differences between the regulatory structure in the UK and and Europe. From 2013, UK regulation will be split between prudential and conduct regulators while the European supervisory bodies operate across the securities and markets, banking, and insurance and pensions sectors.
Anand Associates managing director Bhupinder Anand: “This is a great example of civil servants designing a system out of sync with the rest of Europe and then trying to cement the joins. Given the inevitable overlap between EU and UK regulators, why create a system which does not fit and then set up a committee to fill the gap? It is storing up potential trouble.”