An MP has floated the idea of creating an independent body to support parliament’s oversight of the Financial Conduct Authority and Prudential Regulation Authority.
In a Treasury committee evidence session on the future of financial services yesterday (April 26), Dame Angela Eagle asked Edwin Schooling Latter, the director of markets and wholesale policy & supervision at the FCA, whether an independent body should be set up to aid parliament in understanding the technicalities of regulation.
She said: “Do you think it's worthwhile, that an independent body be set up that reports to parliament independently of regulators, [to monitor] how things are going so that we can actually have the [necessary] technical support...given the very technical nature and the sheer volume of the regulation that you're doing.”
Eagle added that due to the technical nature of regulation, the FCA’s consultations tend only to be responded to by lawyers and people with an interest in a particular part of financial services.
“The consumer rarely gets a voice,” she said.
In response, Schooling Latter highlighted that the regulator already has a number of checks and balances, including independent members on its board, as well as statutory consumer panels.
He said: “We would be concerned about anything that made it more difficult for us to make changes to the rules when stakeholders wanted us to do that...we're rarely criticised for being too quick to act in terms of making sure that our regulatory framework keeps pace with the needs of the consumers and businesses that it needs to serve.”
The evidence session is part of the parliamentary inquiry into the future of financial services after the Brexit transition period ends.
It is examining how financial services regulations should be set and scrutinised by parliament, and will consider how regulators are funded and the extent to which financial services regulation should be consumer-focussed.
Steve Baker MP said the committee had received a number of submissions to the consultation in favour of creating new parliamentary committees to scrutinise the work of the regulators in addition to the Treasury committee.
In response, Schooling Latter said it was up to parliament to decide through which committees the FCA was scrutinised.
He added: “From where I sit, the way that challenge is changing is not so much in terms of the type of scrutiny that's required, but the breadth or width of the subjects that need to be covered.
"But there will of course, be an extra 40 files [of regulation when the EU regulation is on-shored to the UK] that probably warrant a little bit of parliamentary engagement. So how to address that challenge," he asked.