In a report published today, the TSC says the financial services bill should include a range of measures including publishing full minutes of board meetings and a requirement for the Financial Conduct authority to provide information to parliament when asked.
The report says: “The current legislative proposals do not provide adequate accountability, nor the framework for sufficient scrutiny of, and explanation by, the regulator.”
Publishing board minutes was a suggestion made to the committee by FSA chairman Lord Turner who said he would back the move as long as it did not apply retrospectively.
The report also calls for the committee to be able to scrutinise people put forward by the Treasury for the role of FCA chief executive before they are given the role and for industry and “particularly trade bodies” to be more vocal with concerns about regulatory practice.
In the past committee members have been highly critical of the quality of FSA cost benefit analyses, with Conservative MP Mark Garnier describing one study used to justify the retail distribution review as “farcical”. The report says the FCA must challenge “old and inappropriate” FSA practices, singling out CBAs as a particular concern. It says the regulator must improve the quality of information it collects and avoid a tick box approach.
It says: “The Government should include in the bill requirements for far more extensive CBAs and consultation with firms, representative bodies and and panels prior to the introduction of new regulation.”
It adds that when new regulation is forthcoming, the regulator must be clear about exactly what it expects from firms.