Select committee: Treasury Committee
Conclusion 15
First Report - Future of financial services regulation
Published 16 Jun 2022
Paragraph 100
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)
Regulatory independence is critical for the competitiveness and effectiveness of UK financial services regulation. The host of new accountability mechanisms proposed by the Treasury must be carefully reviewed in this light, to ensure that regulatory independence is not compromised. These mechanisms largely seem reasonable as individual changes, but there is a risk that the collective impact could be excessive in its impact on regulators’ resourcing, as well as their ability to make decisions quickly where needed.
From: Treasury Committee, First Report - Future of financial services regulation (HC 141), paragraph 100, 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.