The new committee set to scrutinise the Government’s proposed changes to the regulatory architecture is calling 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 to set up the Financial Policy Committee. The committee will scrutinise the draft bill during 12 weeks of pre-legislative scrutiny before reporting by December 1.
Conservative peer and committee member Baroness Wheatcroft says: “We want to make sure it is a regulatory regime that is effective and efficient. On top of looking at the evidence we will try and ascertain what regulatory frameworks actually have been proved effective elsewhere.”
The committee also 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;
- whether the “twin peaks’ approach of the new system is right;
- whether the proposals will increase or decrease the risk of regulatory arbitrage;
- whether there are any risks in the proposed judgement-based regulation and whether the regulators will have staff with the appropriate skill and expertise;
- whether amending the Financial Services and Markets Act 2000 rather than starting with a new bill is the correct approach;
- whether the accountability of the Bank of England, FPC, PRA and the FCA are satisfactory;
- and whether the FPC’s objective of contributing to financial stability is appropriate.
Evidence should be submitted to the committee by the September 2.