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Treasury committee ramps up calls for FCA chief executive appointment veto

Andrew Tyrie

The influential Treasury committee of MPs has scaled up efforts to hand it the final say in the appointment and sacking of a future FCA chief executive.

The committee wants the power to veto the recruitment and dismissal of the most senior figure at the regulator to ensure its ongoing independence.

The Treasury currently has total autonomy in hiring and firing the FCA chief executive.

However, Conservative MP and Treasury committee chairman Andrew Tyrie has tabled an amendment to the Bank of England and Financial Services Bill that would allow it to block CEO appointments.

The amendment would also apply to the appointment of a future governor of the Bank of England.

Tyrie says: “Public appointments to quangos need more rigorous scrutiny. They have needed it for years.

“More of the most powerful appointments – of the chief executive of the FCA and the governor of the Bank of England – should be subject to full pre-appointment scrutiny. The Government continues to disagree, appealing to the ‘market sensitivity’ of these appointments. That is not an adequate explanation.

“The time has come to entrench the independence of the post of chief executive of the FCA. On behalf of the Treasury committee, I have tabled an amendment to the Bank of England and Financial Services Bill to give this effect.

“The chief executive of the FCA should be able to operate with the confidence that he or she cannot be dismissed without Parliament’s – the Treasury committee’s – approval.

“The public, too, need to have confidence that the Government is not interfering with independent supervisors and regulators.”

The move comes after Chancellor George Osborne ousted former FCA chief executive Martin Wheatley in July last year. The decision was widely viewed as a concession to the City of London.

The Treasury has since confirmed Prudential Regulation Authority chief executive Andrew Bailey will take the reins at the FCA later this year.

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Comments

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  1. Mr Tyrie’s argument seems to be a self contradictory muddle. In one breath he says that “The public…. needs to have confidence that the government is not interfering with independent supervisors and regulators”. Yet, on the other hand, he and his Committee regularly seek to hold the regulator to account and are clearly irked when those efforts are frustrated by its representatives giving them the runaround with evasive and obfuscatory responses to their questions. What does he want — accountability or independence? Either the FCA shall be accountable to a Parliamentary Oversight Committee, which it should be, or it’s allowed to do whatever it wants, which is why it’s such a malfunctioning mess and why the Treasury has initiated its (mis-named) FAMR. He can’t have both.

    The public’s lack of confidence in the regulator and that of Parliament in general stem from the fact that the government HASN’T, until recently, sought to “interfere” with what the regulator does and how it does it. Interference, if that’s what Mr Tyrie wants to call it (intervention might be a better term), is exactly what IS required, because the FCA has clearly demonstrated that it cannot be trusted to do its job effectively without it.

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