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Garnier wants veto on the FCA

Treasury select committee member Mark Garnier has called for Parliamentary oversight to be built into the Financial Conduct Authority.

At a PanaceaIFA event this week, he said the regulator should remain independent but there should be some scope for Parliament to intervene in certain instances.

He said: “We have to think hard about how we build a mechanism into the new legislation to be able to say, on this one, would you mind having another look.

“The Treasury select committee can do that to an extent but there is no supporting legis- lation and sometimes there needs to be, even if it is as simple as a veto over the chairman.”

Garnier added a balance needs to be struck so that MPs could not constantly force the regulator to change tack, which would increase regulatory uncertainty.


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Go for it Mark.
    If this were in place now the fsa would have to rethink the whole rdr.
    As it stands they are completely unaccountable.
    As they have not been democratically elected this is unacceptable.
    Unlike a recklessy stupid government we cannot even use the ballot box to oust them.

  2. Just been talking to a man at Lloyd’s, the regulators are called LONOHs

    Lights On No One Home

  3. OF course and why should the FSA or the FCA not be accountable to parliament? It would be a good day for democracy and the rule of law. Accounatbility is fundamental.

  4. It is truly amazing that the FSA could have been devised in this form – an unelected, totally unaccountable quango, outside the rule of law and parliament’s control.

  5. What about a quick piece of legislation NOW, removing the unaccountability of the FSA?

    Go for it Mark – PLEASE! 🙂

  6. Andrew Tyrie did make me smile with some of the probes about FSA accountability & the “doing something stupid” questions aimed at Hector.

    Methinks the TSC are as exasperated as everyone else at this lot.

    I thought Sants & Nicholls came across as typical quango employees, with a not a real job mentality between them.

    why did Sants keep mentioning PPI selling as an excuse for the RDR??… RDR isn’t going to cover protection & wouldn’t have made any difference. IFAs in the main had NOTHING to do with PPI debacle, so why use it as an excuse to justify getting rid of decent advisers!!

  7. For my money ~ and it is my money ~ I’d prefer to see an independent oversight committee to rein in the completely unbridled licence of the FSA and, when it comes into being, the FCA, to set its own agenda without reference to any other body. It’s all very well for Parliament to be able to ask the FSA/FCA to “take another look” but, if the end result is nothing more than those so asked merely to say that they’ve done so and see no reason to modify their proposals (as, on the strength of past form, they almost certainly would), then nothing will have been achieved.

    Sheila Nicoll’s smug smirk noted by George Mudie at Wednesday’s hearing says it all. Both she and Hector Sants know full well that their appearances before the TSC amount to little more than token charades of accountability. The TSC has no powers of direction over anything the FSA does and nor does any other body.

    What any Parlimentary oversight committee should have is the power to say to the FSA “No, this is wrong, and you’re not going to do it.”

    I, for one, was very disappointed to note that no questions were put to Sants & Nicoll as to why the FSA ~ a body created by Statute ~ has granted itself a total opt-out from the Statutory Code of Practice For Regulators. If the FSA’s complete freedom to do that doesn’t highlight its total lack of accountability, then I’m hard pressed to think of a better example, no matter what Sants might try to claim, and the FCA will be no different. Lack of accountability lies at the very core of just about everything that’s wrong with the UK’s current regulatory framework, which is why the industry is virtually at war with it. Those on the other side have the comfort of knowing that they hold all the cards in a rigged deck.

  8. I met Mark Garnier a while back and can confirm him to be sound fellow. However, his statement that “a balance needs to be struck so that MPs could not constantly force the regulator to change tack, which would increase regulatory uncertainty” is, in my view, somewhat off-beam. What is really needed is a drastic correction to the current massive imbalance.

    There needs to be a system of checks and balances to rein in the FSA’s endless stream of new initiatives for which it is presently accountable to no one. That, surely, would improve the climate of perpetual regulatory uncertainty under which the industry is forced to labour ~ we simply never know what’s coming next. The only thing we do know is that the Cost:Benefit Analyses on which the FSA bases each new initiative is skewed to suit its own agenda and nobody has any power to challenge them.

    The most classic example of this is the Cost:Benefit Analysis on which the FSA launched its RDR, originally £600m but now £1.7Bn. This, says the FSA, will be okay, though, because it’ll be spread over five years, which conveniently overlooks the fact that the great majority of it will still be incurred at the beginning of those five years (as raised at last week’s TSC hearing).

    If the FSA was subject to any sort of accountability, it would, in the light of such a colossal increase, have been forced to go back to the drawing board. As things presently stand, its position is simply that, as the countdown the 2013 has already started, the FSA sees no reason to trouble itself with the irksome inconvenience of stopping that countdown and reassessing the justification for the RDR or its viability.

    The root of almost all of the problems with the current regulatory system is lack of accountability. Everyone else is accountable to the FSA but the FSA is accountable to no one. That surely needs to be changed.

    Just one other thing ~ why does Money Marketing have separate sections for Regulation and Politics? The two are clearly one and the same. Regulation is clearly a political football.

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