Liberal Democrat leader Charles Kennedy has acc used the FSA of failing to act appropriately over the Axa orphan assets case and the Equitable Life debacle.
In a speech to the Financial Markets Association
on Tuesday, Kennedy slammed the FSA's performance in both instances and called upon the Government to force the regulator to take more responsibility for its inaction.
Kennedy slated both the FSA and the DTI for not taking earlier action to prevent Equitable from closing its doors. While acknowledging the company is still solvent, he said there has “clearly been a serious failure by management, by the FSA, and quite possibly by the DTI at an earlier stage which has allowed the situation to develop into the crisis we see now”.
On Axa, Kennedy says the result throws the FSA's willingness to defend the consumer interest into doubt.
He said the life office should not have been given permission to distribute its orphan assets without further examining what was in consumers' best interest.
Kennedy said: “In both the Axa orphan assets' decision and the Equitable Life case, the performance of the FSA as regulator would seem to have been inadequate.
“The FSA was set up to be champion of the consumer. It should be just that. It is time for the Government to force the FSA to be more rigorous and to take its share of responsibility for any mistakes that have been made.”