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MPs demand leaner FCA with lower running costs

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The Treasury committee has demanded greater transparency on the FCA’s running costs asking it to work towards becoming a smaller organisation.

In a letter sent to FCA chairman John Griffith-Jones this week, committee chair Andrew Tyrie accused the FCA of not doing enough to implement a previous recommendation of the Parliamentary Commission on Banking Standards which said the conduct watchdog should become a “smaller, more focused” organisation that costs less to run than the equivalent part of the FSA.

Tyrie says: “The FCA reduced the cost of its existing activities for 2016/17. This process should have begun earlier. In 2015/16 the Parliamentary Commission on Banking Standards’ recommendation was set aside by the FCA. The FCA board’s explanation of its decision to increase the cost of delivering the FCA’s existing activities was insubstantial.”

He says the FCA’s accounts “lack clarity” and asks that costs resulting from changes in the FCA’s activities should be clearly delineated.

Tyrie adds: “Parliament, fee payers and the public need a higher level of transparency. I would be grateful for an explanation of the board decision to set aside the Parliamentary Commission on Banking Standards’ recommendation and for an assurance that the accounts will henceforth enable the costs of pre-existing and new activities be clearly delineated.”

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. I had the good fortune to meet former US President Ronald Reagan a good few years ago while walking along the beach in Santa Monica. Although in his declining years he cut an impressive figure and gave me a very snappy salute and a smile.

    In his prime he had an interesting take on Governments and taxation, saying “a Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it”.

    The increasing cost of regulation on firms is significant and for firms who have consistently kept a ‘clean sheet’ there is a feeling that this is not being rewarded quite as it should be.

    Good call Mr Tyrie!

  2. Are the Treasury Select Committee getting some real teeth at last? I do hope so!

    I recall only too well the contemptuous look on the faces of Hector Sants and Margaret Cole when they were summoned before the TSC. Dick Carne

    Dick Carne

  3. Julian Stevens 29th July 2016 at 1:20 pm

    Cleaner as well as leaner would be desirable.

  4. Ever since Howard Davies was allowed to was given power in December 2012 that acquired powers that transcend the Bill of Rights It is accountable to no one and has its own exemption from judicial review. Since that period it has its own judicial system. It cost have spiralled out of control. Not only did it having the blessing of Brown and Osborne. But those in power at the regulators did not take any heed to the comments and conclusions of Professor Jim Gower

    “strictness of the regulations, should not be greater than is needed adequately to protect investors and this, emphatically, does not mean that it should seek to achieve the impossible task of protecting fools from their own folly. All it should do is to try to prevent people being made fools of. . . One has to make a value judgment on the relative weight to be attached to market freedom and to investor protection”
    May be Mrs May has decided enough is enough post Brexit we have to have different type of regulator if we are to keep Financial service firms in the UK

  5. The regulators have an impossible task, they will never be sufficent in number or quality to do what is expected of them. May as well burn it down as per Eric Bettelheim’s tongue in cheek letter http://ifadu.co.uk/downloads/fsaburnitdown.pdf

  6. With the greatest respect to Mr Tyrie and the TSC, cuts to a entity that is broken is a waste of time, likewise so is throwing more resource and money at it.

    The FCA and likewise the FSA is/was broken ! and its everything to do with the people at the top and who run it.

    I call for every senior manager and anyone in a significant position to be fired !

  7. The assumption in society is that people are honest unless they are proved otherwise. Therefore the police don’t both you unless there is a very good reason. The FCA’s assumption is that you are corrupt and on the take. They spend huge amounts of their resources and yours asking you to prove that you are not.

    Financial Services attracted rogues and chancers because big commissions meant that it was an easy way to make a fast buck. 25 years of regulation has put a stop to that. If the FCA cannot now let those of us that remain to be left alone to get on with our business, subject to a strict set of rules and code of conduct, they are both admitting that their tenue and that of all their predecessors was an abject failure and that there is really no benefit for firms to aim high.

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