Financial Conduct Authority chief executive designate Martin Wheatley has admitted the regulator’s expanding remit will inevitably lead to higher industry costs.
Speaking at a briefing on the FCA in Canary Wharf today, Wheatley said the FCA is taking on more responsibilities such as the supervision of the consumer credit market and a new competition objective but none of the FSA’s existing remit is being taken away.
He said: “Frankly nothing that has been written into the law, or that is being asked of us, is to stop doing anything. The requests being made of us are, can you operate in this space, can you take on competition, can you take on consumer credit, will you be more intrusive.
“Clearly that comes at a cost. I have worked very hard to try and minimise the additional costs to the industry both this year and going forward. We have got a set of practitioner panels that we have talked to about our cost structure and we explain to them what the drivers of our costs are, where we can control them, and where there will be additional costs.”
Asked by Money Marketing what reassurances he could give firms about spiralling regulatory costs, Wheatley said: “The only commitment I can give is I will try as far as I can to maximise the productivity of this organisation and avoid ballooning costs, but the simple fact is with more responsibilities and not being asked to drop anything, there is going to be more cost.”
The FSA will publish the FCA business plan for 2013/14 next week which will set out the new regulator’s priorities and its budget. The total budget for the FSA for 2012/13 was £578.4m, up 15.6 per cent from £500.5m in 2011/12.
Figures compiled by Money Marketing from FSA data suggest the one-off RDR cost to firms could hit £1.5bn with total costs reaching up to £2.6bn after five years.