The chief executive of the UK’s financial watchdog has defended the organisation against criticism from a group of MPs and peers.
A cross-party parliamentary group, comprising 30 MPs and 14 peers, presented a report on the Financial Conduct Authority (FCA) to Parliament on Tuesday.
It condemned the FCA as “incompetent” and “dishonest” and warned the body needs an urgent overhaul.
But chief executive Nikhil Rathi defended the FCA, saying it was dealing with “record numbers of financial crime prosecutions” and had become one of the world’s “most evolved consumer protection regimes”.
Speaking to BBC Radio 4’s Money Box programme, he said: “We will always stay focused on improving our operational performance, but I don’t think it would be fair to characterise the position as nothing has happened.”
He said the balance of promoting growth, including changes to allow more companies to list in the UK, and consumer protection “requires a debate”.
“That does mean that over time a few more things will go wrong, but the risk appetite in the economy needed to adjust to support the growth that the economy needs.”
Mr Rathi said the FCA, whose job is to regulate the conduct of around 42,000 financial businesses in the UK, published more data and was subjected to Parliamentary scrutiny more than “any other regulator in the world”.
The report drew from the testimony of 175 individuals including former employees, scam victims and whistleblowers.
“The picture painted is not pretty,” it concluded.
“The FCA is seen as incompetent at best, dishonest at worst. Its actions are slow and inadequate, its leaders opaque and unaccountable.”
The evidence gathered suggests that the watchdog is “not fit for purpose”, with issues “rooted in the way the organisation is being led, conflicts of interest and the culture that the successive leadership teams have created”, the report read.
The report outlined a number of suggested reforms including the introduction of a supervisory council to assess the authority’s effectiveness, changes to funding, a “no tolerance” policy for lack of integrity and changes to the way senior leadership is appointed.
It concluded that urgent action needs to be taken to address the concerns, or there is a risk that “stakeholders’ patience is exhausted” and discussions will shift from reforming to replacing the organisation entirely.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here