The British Bankers’ Association is lobbying the Government over fears that the new Consumer Protection and Markets Authority and Prudential Regulation Authority will lack accountability.
The Treasury is currently consulting on its proposal to replace the FSA with the PRA, to be positioned under the Bank of England, and pass conduct of business oversight to the CPMA.
Both the PRA and the CPMA will be overseen by the Financial Policy Committee, which will have responsibility for macro-prudential regulation under the Bank of England.
Banks are concerned that the PRA will only be accountable to the court of the Bank of England, giving the BoE too much power. The BBA has formed a working group to compile a joint response to the proposals on behalf of its members.
BBA chief executive Angela Knight adds: “It is clear that further work needs to be done on both the openness of the PRA and on recognition by the CPMA of the importance of regulating the UK markets, which are some of the deepest and most liquid in the world.”
In July, the Government announced that the CPMA and the PRA will be subject to audit by the National Audit Office and the Public Accounts Committee will be able to scrutinise both bodies’ reports.
A Treasury spokesman says: “The Government will consider all views submitted from industry as part of the consultation process.”
Cicero Consulting director Iain Anderson says it is important that the new authorities are held to account. He says: “The level of oversight from Whitehall and Westminster will be as important as the level of oversight within the new bodies themselves.”