The successor to the Financial Services Authority needs to take a “radically different” path to make sure consumers receive stronger protection and major financial failings are discovered earlier, a U.K. Parliamentary committee said.
The FSA “failed consumers badly” and the new agency must take a different approach “to the widely discredited box- ticking practices undertaken by the FSA,” Andrew Tyrie, the chairman of the committee, said in an e-mailed statement.
The Financial Conduct Authority will take over as soon as April from the FSA, which is being abolished as part of a supervisory overhaul in the wake of the financial crisis that saw the nationalization of Northern Rock Plc and bailouts of Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc. The FCA will take on oversight of consumer protection, while the Prudential Regulation Authority, which will become a unit of the Bank of England, will keep watch on systemic financial issues.
John Griffith-Jones, the former U.K. head of accounting firm KPMG LLP, will be the incoming chairman of the FCA. While a report from lawmakers said he “lacks deep experience of some of the consumer-oriented conduct issues,” they still said his appointment “forms part of a welcome and much-needed fundamental shake-up of regulation.”
Both Griffith-Jones and the Treasury must take more aggressive oversight of the regulator to ensure that the board challenges the executive leadership of the FCA, the report said.
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