In a briefing to the Lords, Ignacity says giving the FSA a statutory objective of financial stability would allow the regulator to overrule the Chancellor and Treasury.
It adds that the Bill gives the FSA the power to determine the strategy, action plan and budget of a new financial education body and to levy firms to pay for it.
Ignacity founder Joe Egerton says: “This Bill is a constitutional outrage. It gives the FSA power to define and expand its powers over large areas that should be under the control of elected ministers and to do so without any reference to Parliament.
“It will not stop a single piece of bad behaviour, greedy bankers will simply move from London. So unfortunately will a great many decent individuals and firms that do much good to the economy but will understandably choose to live under the rule of law rather than the rule of the FSA.”