Speaking at today's FCA Approach to Regulation Conference, Blair emphasised the need for a proactive regulator which will put consumers at the heart of its regulatory philosophy. It needs to have the appetite and ability to use its new powers, she said.
The Consumer Panel believes that the FCA will have to be confident and transparent in the way it works, clear about its regulatory purpose and its expectations of firms. Above all, it must be committed to delivering good consumer outcomes.
Kay Blair said “Over the last few years the Financial Services Authority has undergone a sea-change in behaviour. However, if we are to see the new more effective regulation the Panel has advocated, a quantum leap is now needed. It will be critical for the success of the FCA that it moves quickly and decisively to signal a fresh approach to regulation.
“The Panel wants a proactive FCA to address the root causes of misconduct rather than the symptoms of consumer detriment. We want to get rid of the ‘waterbed' effect, where when the regulator tackles one source of sector-wide mis-selling, another new problem all too conveniently rises up to replace it.
“This suggests that the causes are systemic, built in to business models, rather than random events. By addressing suspect business models and potentially toxic products, a more effective regulator will nip problems such as any future PPI in the bud well before consumer detriment escalates and certainly before consumers have lost millions of pounds.
“The FCA needs to encourage and recruit staff that are passionate about, and dedicated to, the delivery of enhanced consumer protection. We want to see the new CEO Martin Wheatley drive an ambitious programme of change building on the success of Hector Sants and Margaret Cole in recent years."
