The FSA is more interested in protecting itself from criticism than in fairly policing financial markets, according to a critique by the Conservatives. The party pledged a radical shake-up of the FSA if elected.
Oliver Letwin, the shadow chancellor said the watchdog over-regulates to protect itself from possible failures and complaints. He criticised the poor quality of FSA staff, saying that all the best people had been poached by industry.
Mr Letwin proposed reforms of the FSA to build on London’s pre-eminence as a financial centre.
He said: “The City of London is a global financial powerhouse. We need to ensure that it continues to make its vital contribution to our economy. That means ensuring that consumer protection and financial stability are achieved in the least burdensome manner possible.”
The recommendations, based on a six-month survey of City practitioners, are outlined in a discussion paper by Richard Spring, the Shadow Treasury Minister, which include: a new competition remit for the FSA; an independent board of directors for the FSA; and Principle-based regulation instead of prescriptive regulation.
Mr Spring said there was a widely-held view in the City that the FSA had become “too bureaucratic, too intrusive, too expensive and, ultimately, unaccountable”.
The Conservatives would seek a “lighter touch” for the FSA, policing markets while allowing businesses to take appropriate risks and the rulebook would be simplified.
At the time of going to press neither the Labour party or the Liberal Democrats were able to provide MI - News with reaction to the Conservative’s plans for the FSA.
