FSA chairman Adair Turner and Treasury financial secretary Mark Hoban have signalled support for the publication of the board minutes of the new Financial Conduct Authority relating to decisions on substantial policy decisions.
In a Treasury select committee hearing last week, Turner said he is “quite favourable” to making board meeting minutes around policies such as the RDR and the mortgage market review public. He also suggested that non-executive board members should give evidence to the TSC to increase accountability of the decision-making process.
He said: “Monetary policy committee minutes allow the world to see the arguments in the debate and you then not only invite the governor but the non-executives to make sure there is an open debate. We could extend that to the FPC, where a direct public policy is addressed.
“When we debate the RDR or the MMR, we are on behalf of society making rules with legal force but the visibility of those debates to the external world is not very great.”
Giving evidence to the TSC this week, Hoban said Turner’s proposal was a “helpful suggestion”. He said the regulator’s consultation process makes their work more transparent than the MPC’s but added that was no reason not to follow Turner’s suggestion.
Conservative MPs and TSC members Andrea Leadsom and Mark Garnier both say the move would make the committee more effective in its role of scrutinising and holding financial regulators to account.
Speaking to Money Marketing, Garnier says: “Getting in at least the non-executive board members would help us understand how decisions are made rather than simply what they are.
“With the minutes from board meetings public, we could say to them ’well, you said this, it is in the minutes, can you explain what you meant’ rather than it all happening behind closed doors.”
Leadsom says: “I would really like to see the committee getting involved earlier in decision processes rather than at the end when it is all a bit of a done deal.”
Garnier says he would like to see FSA non-executives in front of the TSC before the new regulatory structure is in place but warned that the committee’s “monumental” workload could make finding the time for increased scrutiny difficult.