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Categories:Politics,Regulation

TSC: More accountability will mean better regulation

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The Treasury select committee has called on the Government to increase the accountability and transparency of the new financial conduct regulator.

In a report published last week, the TSC says current proposals do not provide for “adequate accountability” or “sufficient scrutiny”.

It says the Financial Services Bill should include FSA chairman Lord Turner’s suggestion of publishing full minutes of Financial Conduct Authority board meetings and a requirement for the FCA to provide Parliament with information when asked. It also calls for the TSC to be given pre-appointment scrutiny over the regulator’s chief executive and for industry to be more open about regulatory grievances.

TSC chair Andrew Tyrie says: “Higher accountability to Parliament will help provide better regulation and avoid the problems that have plagued the FSA.”

In the past, committee members have slammed the quality of FSA cost-benefit analyses. Conservative MP Mark Garnier described one study justifying the RDR as “farcical”. The report says the FCA must challenge the “old and inappropriate” FSA approach. It says the bill should force the regulator to improve the quality of information it collects and avoid a tick-box approach.

It adds that when new regulation is forthcoming, the regulator must be exact about what it expects from firms.

The draft does not discriminate between types of consumers and the report says the bill should “clarify the balance of protection and consumer responsibilities” of different consumers.

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Readers' comments (3)

  • The trouble with requiring the FSA to provide copies of the minutes of its meetings is that it'll very probably convene parallel UNminuted meetings.

    Then again, even if minutes are published, what will the TSC or anyone else be able to do under the present, government-endorsed system of total non-accountability on the part of the FSA? It'll just be a re-run of Hector Sants' and Sheila Nicoll's appearances before the Committee last March.

    Unless or until the government formally retracts its previous statement that the FCA, like the FSA before it, will be accountable only to its own board, nothing will change.

    But the heat seems to be on, so from that we may perhaps draw a few shreds of optimism.

    As for the FSA's Cost:Benefit Analyses (on the rare occasions on which it deigns to undertake them, as it didn't, for example, with the MAS, and look what a white elephant that's been so far), there can be no greater farce than the one on which it launched its RDR juggernaut ~ £600m initially and now pushing past the £2Bn mark. Farces don't get much more farcical (or criminal) than that.

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  • We shall see what we shall see.

    By the time we find out that these wishes don't come true it will be too late.

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  • In 2011, the FSA published almost 7,000 pages in consultation, policy, guidance and discussion documents, totalling some 4.37 Million words – compared with the Bible which has around 800,000 words and the complete works of Shakespeare with
    884,647 words. In all the Regulator issued 18 policy statements, 30 guidance consultations, 22 feedback statements, 30 consultations and 5 discussion papers ~ all of which had to be read, analysed and, where appropriate, responded to by an unknown number of poor souls out here.

    So, if accountability is at last high on the TSC's agenda, it might not be at all a bad idea to include requiring the strangulator, sorry, regulator, to justify its endless production of boatloads of mostly garbage such as the above, the prime purpose of which, many would opine, is self-justification. How about something in the way of Cost:Benefit Analyses?

    Then again, on the increasingly rare occasions on which the FSA does deign to commission any sort of Cost:Benefit Analysis, they tend to be so turgidly voluminous that they themselves ought to be subject to a Cost:Benefit Analysis. What a sick joke it all is ~ unless, of course, you happen to be one of the fortunate few thousand on the inside. If ever there was an Inside Job, the RDR must surely be it.

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