Regulation expert Richard Hobbs has doubts over whether a new tripartite consumer protection committee proposed by the FSA, would be effective in its main aim of identifying emerging risks.
Last week the FSA, the Office of Fair Trading and the Financial Ombudsman Service proposed the committee to take on identifying risks that could become widespread as well as ways of dealing with them. The regulator says specialists from the three bodies would aim to deal with threats quickly, adding that this complements the FSA’s existing supervision regime.
Lansons director of regulatory consulting Richard Hobbs says: “It is hard to see how a joint committee that meets twice a year, even with more extensive working arrangements behind the scenes, could achieve anything beyond the work that is already carried out within the respective bodies. All the tripartite committee will be able to do is receive information from elsewhere that identifies risk, confirm the existence of that risk and decide what to do about it.
“This new body is not about risk identification, it is about enhanced coordination.”
TLT head of financial services regulation Suzanne MacDonald says: “On the face it, the new consumer protection committee sounds like a good idea but I have concerns about how this will work in practice.
“I suspect it has been established partly in response to criticism levied at the FSA that it has not been proactive and has not taken action when it needed to.”
She asks if this is “purely a political move by the FSA”.
Evolve Financial Planning director Jason Witcombe says: “Acting proactively rather than reactively is good for everyone. We need joined-up thinking between these bodies and it seems like a pretty logical step.”