The Financial Conduct Authority’s single strategic objective should be changed from protecting and enhancing confidence in the UK financial system to maintaining a fair and transparent market for consumers, says Which?
Chief executive Peter Vicary-Smith said an objective to protect and enhance confidence in the system could encourage the regulator to keep problems quiet.
He said: “It is absolutely the wrong objective. It should be to maintain a fair and transparent market in financial services. If you want confidence in there, it should be fair and transparent markets which lead to justifiable confidence. The best way to have trust and confidence in the financial services industry is to never tell anyone there is a problem.”
Consumer Focus chair Christine Farnish added that a reluctance to upset confidence could even stop the regulator intervening in emerging problems before they blow up.
BBC Moneybox presenter Paul Lewis told the committee the FSA should follow the lead of the Food Standards Agency and publish lists of products it finds problems with. He said: “Do we have any less confidence in companies because we know they have withdrawn food? No. But speak to the FSA and it will not tell you what products it has discussed or withdrawn.”