In its response to the Turner Review, the FSCP says the FSA must become a more transparent regulator by giving consumers information on the companies that are performing well, as well as those that are performing badly.
The panel also argues that the FSA should regulate all aspects of business conducted by the firms it authorises, including provision of consumer credit.
The FSCP says: “There must be an end to institutions lending irresponsibly and so encouraging consumers to take on excessive debt. It makes sense to have credit and savings supervised by the same people.”
It is also calling for the regulator to increase its conduct of business supervision and take a tougher stance on enforcement.
FSCP acting chairman Adam Phillips says: “This is the time to challenge whether the FSA’s overall regulatory approach works for consumers as well as markets. We agree with the Turner Review that regulatory reform is necessary but we also want to see a clear focus on better outcomes for consumers. It’s all very well concentrating on prudential reform to improve the stability of the industry, but that must not be at the expense of consumers.
“One radical step would be to give the FSA power to regulate all aspects of business of the firms it already regulates, so consumer credit would move from the OFT to FSA for authorised firms. We believe the FSA is better placed to put an end to firms lending irresponsibly and encouraging excessive debt – it is what most consumers assume happens now and it will stop firms hiding behind any division of regulatory duties between the OFT and FSA.”