Select committee: Treasury Committee
Conclusion 10
First Report - Future of financial services regulation
Published 16 Jun 2022
Paragraph 74
Addressed to HM Treasury
Treasury Committee Future of Financial Services All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
The Treasury should continue to reject any calls for a growth and/or competitiveness objective to become a primary objective. This would increase any pressure on regulators to trade off competitiveness against resilience, and would undermine the regulators’ ability to deliver on their core functions. There is a danger that as memories of the financial crisis fade, its lessons are forgotten.
From: Treasury Committee, First Report - Future of financial services regulation (HC 141), paragraph 74, 16 June 2022
Government response
The government responded to the whole report on 7 September 2022 (deadline 16 August 2022).
Summary written by Accountability Index from the government's response. It is not the government's own words.HM Treasury "notes" each of the Committee's recommendations, setting out the measures in the Financial Services and Markets Bill and, in places, explaining why it does not take the approach the Committee suggested.
- On secondary objectives, the government notes the recommendation and says Clause 24 of the FSM Bill implements new secondary objectives for the FCA and PRA on medium to long-term growth and competitiveness, subject to regulators "aligning with relevant international standards".
- On financial inclusion, it does not consider that a separate 'have regard' for the FCA "would lead to a different approach or tangible improvements over the current arrangements", noting that government already publishes an annual report.
- On a forward schedule for moving EU files to the rulebooks, it recognises that further information on the programme is important and "expects to set out further information in due course".
- On Treasury funding of rule reviews, it notes the recommendation and says the Bill requires the Treasury to 'have regard' to minimising the impact of a direction on the regulator's other functions. On CBA panels, it "does not agree" they would impact regulators' independence.