The committee of MPs and lords scrutinising the Government’s proposed regulatory overhaul has called for evidence on how well it will prevent or deal with another financial crisis.
The Government published its draft Financial Services Bill in June. It sets out plans to split the FSA into the Financial Conduct Authority and the Prudential Regulation Authority and set up the financial policy committee.
The committee, made up of six MPs and six lords, will examine the draft bill during 12 weeks of pre-legislative scrutiny and will report by December 1. It wants evidence on whether the objectives of the FCA, the main one being to protect and enhance consumer confidence in the UK’s financial system, are correct.
The committee also wants evidence on the suitability of the twin peaks approach and whether it increases or decreases the risk of regulatory arbitrage, whether there are any risks in the proposed judgement-based regulation and if the regulators will have staff with the appropriate skill and expertise.
It also wants evidence on whether amending the Financial Services and Markets Act 2000 rat-her than writing a new bill is the correct approach.
It is calling for evidence on whether the accountability of the Bank of England, the FPC, the PRA and the FCA is satisfactory and if the FPC’s objective of contributing to financial stability is appropriate.
Speaking to Money Marketing, committee member and Conservative peer Baroness Wheatcroft says: “On top of looking at the evidence, we will try and ascertain what regulatory frameworks have been proved effective elsewhere. We want to make sure it is a regulatory regime that is effective and efficient.”
Evidence must be submitted to the committee by September 2.