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MPs want more accountability from FCA

The Treasury select committee has called on the Government to increase the accountability and transparency of the new financial conduct regulator.

In a report published today, the TSC says the financial services bill should include a range of measures including publishing full minutes of board meetings and a requirement for the Financial Conduct authority to provide information to parliament when asked.

The report says: “The current legislative proposals do not provide adequate accountability, nor the framework for sufficient scrutiny of, and explanation by, the regulator.”

Publishing board minutes was a suggestion made to the committee by FSA chairman Lord Turner who said he would back the move as long as it did not apply retrospectively.

The report also calls for the committee to be able to scrutinise people put forward by the Treasury for the role of FCA chief executive before they are given the role and for industry and “particularly trade bodies” to be more vocal with concerns about regulatory practice.

In the past committee members have been highly critical of the quality of FSA cost benefit analyses, with Conservative MP Mark Garnier describing one study used to justify the retail distribution review as “farcical”. The report says the FCA must challenge “old and inappropriate” FSA practices, singling out CBAs as a particular concern. It says the regulator must improve the quality of information it collects and avoid a tick box approach.

It says: “The Government should include in the bill requirements for far more extensive CBAs and consultation with firms, representative bodies and and panels prior to the introduction of new regulation.”

It adds that when new regulation is forthcoming, the regulator must be clear about exactly what it expects from firms.

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Comments

There are 11 comments at the moment, we would love to hear your opinion too.

  1. Becoming a headcase IFA 13th January 2012 at 8:56 am

    Lord Turner would obviously fear any retrospective publishing of minutes. What an embarrassment I suspect they would be.

  2. Derek Bradley ceo PanaceaIFA 13th January 2012 at 9:00 am

    Quite right too but “publishing board minutes was a suggestion made to the committee by FSA chairman Lord Turner who said he would back the move as long as it did not apply retrospectively”?

    How strange that an organisation that applies retrospection to those it regulates would object to it applying to them!

  3. The FSA currently puts its Directors minutes on its website, admittedly some five or six months after the event.

    However, these are the abridged minutes and the more in-depth version is available albeit via a FOI request.

    Even these more comprehensive minutes only show the matters that the FSA is prepared to make public. The real nitty gritty is still secreted away.

  4. MI5,MI6 and FSA. Secret organisations above the law!

  5. Pity we don’t have a ‘trade body’ then

  6. These proposals are well overrdue and a necessity in a modern society. Sadly, however I’m not holding my breath.

  7. It’s hardly surprising that Lord Turner is resistant to the idea of any sort of accountability for the FSA’s activities to date, given that the first item on the agenda for any “thematic review” would almost certainly be the totally skewed Cost:Benefit Analysis on which the FSA is steamrollering ahead with its RDR. £600m initially and now nudging past the £2Bn mark? The FSA certainly doesn’t want any interfering busy-bodies picking that one apart, not to mention a host of other issues such as KeyData (why no action on the findings of that 2007 arrow visit?), Barclays/Aviva (victims demonstrating outside Parliament about the FSA’s lack of action), the MPPI mis-selling scandal (allowed to reach epidemic proportions before action was finally taken), ArchCru (that extremely fishy £54m compensation deal), the ever-increasing yearly bonus pot (probably approaching £30m for 2011), vast pay-offs for the likes of Clive Briault (all with OPM, of course), immunity from accountability for people such as John Tiner (supposedly in charge of the FSA whilst the banking crisis was brewing). The list of cans of worms goes on and on.

    And anyway, why should any proposals for greater accountability on the part of the FSA/FCA be subject to conditions decreed by the likes of Lord Turner? On just what grounds should the terms of the FSA’s accountability be negotiable? The FSA itself certainly doesn’t negotiate over its own regulatory initiatives, does it? It’s a matter of We’ve “taken on board” the submissions in response to our “consultation” (though we aren’t going to publish for all to see and to debate just what those submissions actually were), this is what’s going to happen and you lot will either go along with it or we’ll confiscate your livelihoods.

    Yet Hector Sants would have us believe that he’s “a strong supporter of accountability”. The facts suggest otherwise.

  8. MPs want more acccountability.
    I want to win the lottery.
    Neither is going to happen!!!!

  9. I want to be left in peace, to do my work, without an unelected unaccountable, out of control quango
    interfering in my every step whilst fleecing me in the process.
    I also wish to retire without the possibility of them hounding me into the grave and beyond.

  10. Julian Stevens makes a particularly pertinent point in his comment, namely the list of items that the FSA have handled badly. So far they have avoided a concerted level of public scrutiny because all these items become headlines one day and forgotten the next. When there is a need to call the FSA to account for its actions were is the Register to counter their own belief in their infallibility.
    Perhaps there is a need for a public recording, in greater detail, of the many dubious decisions and actions of the FSA in order that both the industry and the public have a ready access to the facts, rather than a hazy memory. Such omissions need to be substantive i.e we missed RBS because we were blindsided by RDR, in order to have strength.
    If people want to submit details of such occasions then I would due happy to keep a record that can be produced on any Web Site that would like to use it. I can be contacted on glenmac45@gmail.com.

  11. If the TSC considers it necessary to call on the government to make the FSA & FCA more accountable, then it should be demanding two things:-

    1. A formal retraction of the government’s earlier declaration that the FCA, like the FSA before it, will be accountable only to its own board (which, of course, means accountable to nobody) and

    2. The setting up of a body to enforce actively the Statutory Code of Practice For Regulators. Presently, no such body exists, the FSA knows it and accordingly completely ignores it. So what was the point of the Code’s creation in the first place? If it’s Statutory, then it’s the Law. So why does the TSC continue to act much in the same way as the FSA, namely as if the Code simply doesn’t exist?

    Perhaps readers who reside in either Pat McFadden’s or Andrew Tyrie’s constituencies write to them formally requesting an explanation on this point.

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