The head of Britain’s financial regulator said it was “unfair” for MPs to criticize the agency for failing to reform after years of scandal.
Nikhil Rathi, chief executive of the Financial Conduct Authority, said the agency was “fighting financial crime… on a scale never seen before in the UK”.
He was responding to a report by a cross-party group of MPs which said FCA ‘incompetent’ And its culture is “getting worse rather than better.”
It also accuses the FCA of failing to properly investigate the banks and other financial organizations it regulates, suggesting it may be too close to them.
The report released on Tuesday follows strong opposition from the FCA. Dealing with Neil Woodford Investment Scandal and other controversies For example, it goes to the bank to report.
It cited similar criticism from other reports over the years, including A paper from the New Urban Agenda 2016 The company said there was an “entrenched box-ticking culture” at FCA.
The report also refutes claims that FCA has changed.
“Readers must not fall into the trap of thinking that the FCA has addressed the long list of issues that carefully collected evidence suggests it has, because this is not the case,” the report said.
However, speaking to BBC Radio 4’s Money Box programme, Mr Rathi defended the FCA against the claims and argued the regulator had improved.
“We will always be focused on improving our operational performance, but I don’t think it’s fair to characterize this as nothing happening,” he said.
He added that the FCA had “record numbers of financial crime prosecutions” and had “one of the best consumer protection regimes in the world”.
The report goes on to suggest that the FCA may have been “captured”, meaning it is too close to banks and other financial organizations to take action against them.
It argued that there were “unmanaged conflicts of interest” within the FCA because it sought to both protect consumers and promote economic growth.
It suggested the regulator should be stripped back to one purely focused on consumer welfare, allowing the government to focus on economic growth.
It also recommended that FCA’s leadership should be replaced “if necessary” and called its current leadership “opaque and unaccountable.”
Lartie said the issue of growth versus consumer protection “needs to be debated” but Chancellor Rachel Reeves was pushing for growth.
He acknowledged that boosting growth could mean increased risks for consumers and pointed to changes being made to allow more companies to list in the UK, such as on the London Stock Exchange.
“We have been very transparent in our discussions over the past 18 months that this creates additional risks to the system, [but] We think it’s necessary,” he said.
“It does mean that there will be more problems to come over time, but risk appetite in the economy will need to adjust to support the growth that the economy needs.”
On accountability issues, Lartie said the FCA appeared before parliament and select committees and published more data than “any other regulator in the world”.
A Treasury spokesman told the BBC: “Many of the issues explored in the report have been subject to extensive review and as a result the FCA has made some changes.”
