ICT Views

House of Commons Debate on FCA Failings – The Results are (not quite) in

by: (Research & Development Manager) on

Let’s cut to the chase. The motion lapsed, they ran out of time and so were unable to complete the debate and take a vote (you can read the full debate here).

commonsNow, was this a sneaky tactic by those opposing the motion? It’s an interesting thought that tactics like this could be employed, one could even view Parliamentary debates as a sporting event, maybe “parking the bus” (to use a footballing analogy) is a common tactic. I’m afraid I wouldn’t know, I’ve not observed many of these events before (alright, none at all actually), but putting 11 men behind the ball and not allowing any shots on goal seems like a pretty good way to nullify the attack.

So, what was said and where do we go from here?

Guto Bebb, Conservative MP for Aberconwy moved the motion that the House of Commons believes the Financial Conduct Authority in its current form is not fit for purpose and has no confidence in its existing structure and procedures. He aimed to use five examples to show how the FCA is failing in its mission statement:

  • The voluntary redress scheme for the mis-selling of interest rate swap products – an issue highlighted four years ago by Mr Bebb which has still not been dealt with.
  • The Connaught Income Fund – where fraudulent behaviour was reported but a further year passed before the fund was wound up, in which time more than half the total investments in the Connaught income stream occurred.
  • The report on the failures of HBOS – which took three years to be produced and included factual inaccuracies and selective use of evidence.
  • The promised report on the Global Restructuring Group – a Section 166 investigation was ordered by the FCA in 2014 but no evidence of this has been seen. 
  • The decision not to move ahead with the review of banking culture – made by FCA executives without consultation with the FCA Board.

Integrity and Independence

The question of integrity and independence was also raised; quite rightly the regulator must be independent and must work with integrity if it is to deliver a healthy financial marketplace and treat customers fairly. Some of the examples given in this debate fully support the argument that the respect and confidence in the regulator has been lost by many customers, but is this widespread enough to warrant a complete change in regulator? Likened to a goalkeeper saving many, many shots before letting in one crucial goal, maybe the debate focused too much on the bad news instead of also looking at some of the good the regulator has done.

The recent appointment of Andrew Bailey as the new Chief Executive of the FCA is an interesting twist in this particular story. Reportedly hand-picked by the Chancellor of the Exchequer, this suggests a closer link between the Government and the regulator than maybe there should be? How can the FCA claim to operate independently if their Board and senior management don’t even get a say in the recruitment of their own Chief Executive?

2016 will be an interesting year in the life of the FCA, I have a feeling there’ll be a few more twists and turns to come.


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