FCA pledges rapid response to market failure

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FCA pledges rapid response to market failure

The City watchdog’s interim chief executive has vowed to shorten the time it takes it to assess a market or firms to a "matter of hours".

Speaking on an Inside FCA podcast, published today (June 10), Chris Woolard, the Financial Conduct Authority’s interim CEO, said the FCA had learned some “big lessons” from its handling of the coronavirus crisis, primarily around data collection and timely responses.

He said: “I think one of the big lessons from the crisis is the importance of timely, rapid information that really allows you, in a matter of hours, to assemble a picture on a market or a series of firms.

“[That] has been absolutely vital where we have it and that’s something I think we should have uniformly across every single market that we regulate. We should make full use of it to deliver a better public service.”

Mr Woolard said the FCA had been forced to reprioritise “quite significantly” due the coronavirus, saying about two thirds of its new planned activity had been deliberately postponed to accommodate the more pressing work required.

Such work included ensuring people who had been impacted immediately by the “unprecedented” situation were able to get some degree of temporary relief, making sure financial markets worked well and tackling areas of the market which did not run effectively during the crisis.

He also admitted there was still “an awful lot of work that needs to be done” on retail investments to ensure consumers are protected effectively and said retail investments was a “clear area of real focus” in terms of its ongoing work.

He said: “[Our business plan] gives some clear areas of real focus for us as part of our ongoing work...one of those is around retail investments where there is still an awful lot of work that needs to be done to make sure we’ve got a really good basis for protecting consumers.”

Mr Woolard added the FCA’s work on retail investments also linked to some issues brought forward by the coronavirus crisis.

He thought the environment of low savings rates — exacerbated by the base rate cuts made in response to the pandemic — would push investors towards investments that provided higher rates of return but are typically riskier.

He said: “I think all those pieces of work have, to some degree, a resonance with what we’re seeing happening at the moment with Covid as well.

“For example, on something like retail investments, we know people are looking for better rates of return as they see their savings or their investments impacted by what’s happened with coronavirus.”