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.