The Building Societies Association has stressed the importance of co-operation between the Prudential Regulation Authority and the Financial Conduct Authority, saying the two bodies should not be fighting “turf wars”.
Labour MP Nick Brown questioned the BSA and the Association of Financial Mutuals about dual regulation as part of the joint committee hearing on the draft Financial Services Bill last week.
BSA head of financial policy Jeremy Palmer welcomed the fact that the PRA and the FCA will have a statutory duty to co-ordinate with each other under the new regulatory structure.
But he added: “Whether it works will come down to culture as well as legislation. We think it is very important that the successor bodies should co-operate and not empire-build or fight turf wars.”
AFM chief executive Martin Shaw said there are some complications over what constitutes prudential regulation and what constitutes conduct regulation. He said in some countries that operate dual regulation, it can be difficult for the conduct regulator to discharge its powers fully, although he does not believe that will be the case in the UK.
Shaw said: “The concern we have is the degree of overlap between the two regulators where both of them are trying to do the same job in different ways and therefore whether the cost burden on firms increases as a result.”