Financial Conduct Authority boss says MPs’ criticism ‘not honest’ | EUROtoday

The boss of the UK’s monetary watchdog has stated criticism from MPs that it has didn’t reform after years of scandal is “not fair”.

Nikhil Rathi, chief govt of the Financial Conduct Authority, stated it’s “tackling financial crime… on a scale that has never been done before in the UK”.

He was responding to a report from a cross-party group of MPs which stated the FCA was “incompetent” and that its tradition has “got worse rather than better”.

It additionally accused the FCA of failing to correctly examine the banks and different monetary organisations it regulates, suggesting it could be too near them.

The report printed on Tuesday got here within the wake of backlash in opposition to the FCA’s dealing with of the Neil Woodford funding scandal and different controversies corresponding to its debanking report.

It referenced years of comparable criticism from different reviews, together with a 2016 paper from the New City Agenda which stated there was “a deep seated culture of box-ticking” on the FCA.

The report additionally hit again in opposition to the suggestion that the FCA had modified.

“It is imperative the reader doesn’t fall into the trap of thinking that the FCA… has already resolved the long list of problems the evidence that has been painstakingly gathered shows it has, because it hasn’t,” the report stated.

However, in an interview with BBC Radio 4’s Money Box present, Mr Rathi defended the FCA in opposition to these claims and argued the regulator had improved.

“We will always stay focused on improving our operational performance, but I don’t think it would be fair to characterise the position as nothing has happened,” he stated.

He added that the FCA is making “record numbers of financial crime prosecutions” and that it’s “one of the most evolved consumer protection regimes in the world”.

The report goes on to state that the FCA could have been “captured”, that means it’s too aligned with banks and different monetary organisations to behave in opposition to them.

It argues there are “unmanaged conflicts of interest” throughout the FCA due to its position each to guard customers and promote financial development.

It instructed the watchdog must be stripped again to a regulator purely centered on client wellbeing – leaving the federal government to deal with financial development.

It additionally instructed that the FCA’s management must be changed “if necessary”, calling its present leaders “opaque and unaccountable”.

Mr Rathi stated the problem of development versus client safety “requires a debate”, however that Chancellor Rachel Reeves was pushing it to pursue development.

He accepted that selling development can imply growing dangers for customers, pointing to modifications it made to permit extra firms to checklist within the UK, corresponding to on the London Stock Exchange.

“We were very transparent all the way through that discussion over the previous 18 months that this would bring more risk into the system, [but] it was judged that this was necessary,” he stated.

“That does mean that over time a few more things will go wrong, but the risk appetite in the economy needed to adjust to support the growth that the economy needs.”

On the problem of accountability, Mr Rathi stated the FCA seems earlier than Parliament and choose committees and publishes extra knowledge than “any other regulator in the world”.

A Treasury spokesperson informed the BBC: “Many of the issues explored in the report have been extensively reviewed, and as a result the FCA has made a number of changes.”