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Labour MP: Treasury committee will prove Govt ‘neutering’ FCA

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A Labour MP has claimed an investigation into the FCA’s decision to drop an inquiry into banking culture will prove the regulator did so on instruction from the Government.

The Treasury committee will grill FCA chairman John Griffith-Jones and acting chief executive Tracey McDermott on 20 January as it seeks to evaluate the decision in the context of the implementation of the Vickers reforms, set out to improve conduct in banks.

However, committee member and Labour MP John Mann says he expects the session will also show the FCA dropped the report at the prompting of the Government.

Speaking to the BBC, Mann said: “It’s my belief that the Government has interfered.

“I think our inquiry will prove that, hopefully prove precisely how they’ve interfered. The FCA hasn’t reached its own conclusions, it’s been told what to do – it’s been told via the Treasury.”

The Labour MP says Chancellor George Osborne wanted to “neuter” the FCA and parachute “one of his senior officials” in to run the regulator.

Questions have been raised as to the independence of the regulator since Osborne declined to renew the contract of FCA chief executive Martin Wheatley.

Two Treasury mandarins are understood to be among the candidates to replace Wheatley, while McDermott this week ruled herself out of the running for the job.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. And not before time either !

    The TSC needs to be aware (I am sure they are already) that this (interference) is “NOT” just isolated to this government, but the previous government also.

    The regulator needs proper accountability and governance, and not used as a political pawn for its own agenda and revenue !

    Martin Wheatley, made a statement himself that the FCA was to political (in terms of demands made on it by the treasury),……. his Ratner moment ? we may never know

    I for one would like to know where the £1.5 billion in fine money confiscated by George Osbourne has actually gone ?

  2. Too right they are bloody interfering. This is most probably why the FMAR review now wants to trash RDR and probably why Wheatley is on his byke.

    The damage that Boy George is doing to financial services is incaculable. Makes Crash Gordon look positively benevolent.
    George next leader of the (so called) Tories? – I sincerely hope not.

  3. @ DH – Accountability is the central issue all the rest is rearranging deck chairs. The FCA has to be accountable to the body that created it Parliament. We currently have “Peek-a-Boo” accountability. The Treasury can interfere at will and then not take responsibility for its actions.

    I believe that FCA is too compromised to continue and Advisers need to get out this PAR _ The Professional Advisers Regulator

  4. There’s an awful lot going on behind the scenes that the powers that be want to keep hidden from the wider world, primarily I suspect that the FCA ain’t calling its own shots any more, which is a very good thing.

    There’s no agenda to “trash the RDR”, merely an admission that in some ways it was too heavy handed (like so much of what the FSA/FCA does/did) and that if commission on regular contributions can be reintroduced in a transparent and as benign manner as possible, it might well help with persuading people to embark on long term regular savings.

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