By Huw Jones
LONDON (Reuters) – A new UK financial services law should not hamper the Financial Conduct Authority’s ability to act quickly or undermine its independence, the watchdog’s interim chair said on Wednesday.
Financial services minister Andrew Griffith said on Tuesday that he would not interfere in the operational independence of the FCA and the Bank of England, but would propose a “safety value” to allow finance ministry intervention if there is a significant public interest.
The wording of the new yet-to-be finalised power would be introduced in coming weeks into the financial services and markets bill now before parliament, Griffith said.
After leaving the European Union, Britain can now write its own financial rules with Prime Minister Liz Truss promising to “unshackle” the City with a “Big Bang 2.0” package of more radical changes due this month in areas like insurance, where regulators have shown some reluctance.
Richard Lloyd, interim chair of the FCA, told reporters on Wednesday that his board is proud of the regulator’s independence, which is well respected, well understood and copied internationally.
“It’s really important that we have mechanisms obviously that hold us to account, but also don’t slow us down, don’t stop us being more agile, more able to intervene when necessary,” Lloyd said.
The watchdog is revamping itself to act faster after being criticised for being too slow to stop scams and mis-selling.
Lloyd said the intervention power in the bill “is one particular concern”.
The Bank of England’s Financial Policy Committee said in its quarterly statement on Wednesday that the stability and predictability of Britain’s rules would continue to be critical given the size of its financial system.
The operational independence of regulators was an essential part of the regulatory regime, the FPC said, adding that it would consider the implications of all amendments to the financial services bill once details were available.
(Reporting by Huw Jones; Editing by Paul Simao)
