Recommendations on the draft Financial Services Bill by a Joint Committee of MPs and Lords released today have been largely welcomed by Which?
The Treasury will now consider the recommendations and make amendments to the draft Bill which was first unveiled in July 2011. The Bill is set to go to parliament in 2012.
The report has concluded that the objectives of the three new regulatory bodies need to be clarified. The Bill will create the three new bodies operating within the Bank of England.
The Financial Policy Committee (FPC), the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) will broadly cover overall financial regulation/the economy, the solvency of individual companies and consumer protection respectively.
Which? welcomes the proposals
Which? is pleased that the Joint Committee agreed with us that a focus on confidence could lead the FCA to conceal or ignore weakness. The Committee’s assertion that the FCA should aim to promote ‘fair, transparent and efficient financial services markets that work well for users’ resonates with our longstanding call for the FCA to have a strategic objective which gives it a clear focus on improving the way consumers are treated.
The Committee also agreed with Which? that competition should always be seen as a means of achieving better outcomes for consumers rather than an end in itself.
With George Osborne set to deliver the Government’s response to the Independent Commission on Banking this afternoon Which? also welcomed the Committee’s desire to see the legislation for the ring-fencing of retail and investment banks ‘should be brought forward during the 2012-13 parliamentary session in order to give banks a clear framework to work to’.
Dominic Lindley, principal policy advisor at Which?, said: ‘We welcome the findings of the committee, in particular the revised FCA objective and the proposal to accelerate the ring-fencing legislation. We hope the Government will take these recommendations on board when they table a Bill in the new year’.
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