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Tyrie warns time pressures hindering scrutiny of new reg structure

Treasury select committee chairman Andrew Tyrie says Government pressure to legislate for the new regulatory structure early next year is making it difficult to properly scrutinise the move.

As a result, Tyrie has written to the Parliamentary committee scrutinising the legislation for the forthcoming regulatory shake-up pointing out areas of particular concern. The letter, sent to joint committee on the draft Financial Services Bill chairman Peter Lilley last Tuesday, says the two committees should co-operate to ensure as much of the bill is scrutinised as possible before the change comes into effect in 2013.

It sets out 15 areas the TSC would like Lilley’s committee to examine and asks for a response setting out those it intends to look at. They include the way the Financial Ombudsman Service and the Financial Conduct Authority handle complaints under the new system, the role and objectives of the FCA and new product intervention powers it will have.

The letter says: “This is a once in a generation opportunity to get the legislative framework right. But this task has been made more difficult by the Government’s determination to legislate early next year, leaving limited time available for scrutiny.”

The TSC is currently running inquiries into the accountability of the Bank of England and the FCA and the Independent Commission on Banking’s recent final report which set out proposals to ringfence retail banking operations within universal banks.

The letter asks for the joint committee to consider looking at the implications for firms of having two regulators, the Prudential Regulation Authority and the FCA, whether product intervention powers are too draconian and the culture and accountability of the FCA.

It also proposes closer scrutiny by the joint committee of what EU regulatory initiatives mean for the new system,whether the new structure will work in the context of the European Supervisory Authorities and how the recommendations of the Independent Commission on Banking should be legislated for.

The draft bill is currently undergoing pre-legislative scrutiny with the joint committee expected to publish its report on December 16.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Which is all very well, but does anyone actually take any notice of anything that Mr Tyrie might have to say in such matters, bearing in mind that the government has already announced that the FCA, like the FSA before it, will be accountable only to its own board (and therefore to nobody else)?

    And what about the fact that Mark Hoban effectively endorses everything and anything that the FSA does or declares that it wants to do?

    Raising such issues is all very well but, if nobody’s providing any sort of meaningful response, what’s the point?

  2. This is surely not something that should be rushed. An arrogant FSA has hardly covered itself in glory over the past 14 years, unless decimating an entire industry was it’s main remit all along. The new regulatory bodies need to be fairer, more consistent in their practice and powers and listen to Parliament & the industry.

  3. It’s like FSA consultations, I used to take part in them religiously. Experience however has taught me that they don’t take a blind bit of notice of any of it so I don’t bother anymore!

  4. As in all things TSC doe, the gentlemanly approach of Andrew Tyrie goes to show that the new legislation is probably already a done deal, I will assume his request will get the same treatment as his input to the FSA to delay implementation of RDR by a year, in the words of Charles de Gualle when approached for UK to join the EC “Non”

    It will end in tears as usual and the poor consumer picking up the bill will pay through the nose, that is of course if they have any money left to invest in their pensions, savings and life assurance after the effects of the inflationary pressures on the economy.

  5. This Government is as pathetic as the last one and will be making a huge mistake in rushing this through and making any new regulator unaccountable. But they know it will not be them that suffers and they have their own agenda, which does not put the public at the top of their list of priorities.

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