A cross-party group of MPs has redoubled its attacks on the Financial Conduct Authority, saying the watchdog has been “disappointing, defensive and dismissive” in its response to criticism.
The group, which includes Jeremy Corbyn’s former shadow chancellor John McDonnell, said the FCA had been “unconstructive” since it published a report last year which said the regulator was failing customers.
Bob Blackman, chairman of the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Service, said the FCA is in “denial” and “seemingly unable to absorb evidence-based criticisms being made of it”.
The regulator seems unwilling to engage with genuinely concerned Parliamentarians, many of whom have constituents who feel very strongly that they have been let down terribly by the FCA
The initial report claimed the FCA – which regulates Britain’s financial sector – is too close to the companies it oversees, and that it is not properly serving customers as a result.
The findings were based on testimony from 175 people including whistle blowers and former and current employees.
Mr Blackman added: “Very disappointingly, the FCA has not responded at all to our polite requests to meet with them to discuss our report and the many issues it raised.
“The regulator seems unwilling to engage with genuinely concerned Parliamentarians, many of whom have constituents who feel very strongly that they have been let down terribly by the FCA.”
An FCA spokesperson denied Mr Blackman’s claims, saying it “has offered to meet” the APPG’s leaders.
FCA chairman Ashley Alder is understood to have offered to meet with the co-chairs of the group earlier in January.
We recognise there are a range of views in Parliament about our objectives. We continue to protect consumers while embracing the new secondary growth and competitiveness objective given to us by Parliament
The spokesperson added that the watchdog does “not recognise the characterisation of the FCA” in the initial report.
They said: “We recognise there are a range of views in Parliament about our objectives.
“We continue to protect consumers while embracing the new secondary growth and competitiveness objective given to us by Parliament.
“As we set out in our recent letter to the Prime Minister, we welcome a debate and as broad a consensus as possible about the appropriate risk appetite we should work to.”
The cross-party group’s first report in November, while scathing, prompted controversy after one of its members, ex-City minister John Glen, quit after publication, questioning its methodology.
He said it relied too heavily on “the gripes of anonymous embittered current and former employees”.
Nonetheless, the latest attack puts more focus on a regulator which is already facing pressure from Labour to pursue a more company-friendly model of regulation so as to promote economic growth.
Mr Blackman compared the FCA to the scandal-hit Post Office, saying it has “too many red flags” and challenging the regulator’s claim that 85% of its stakeholders are satisfied that it is protecting customers.
The Post Office is the subject of a major probe over the Horizon IT scandal, which involved hundreds of subpostmasters who were wrongly convicted of stealing, which has since been labelled Britain’s biggest miscarriage of justice.
Mr Blackman said: “Like the Post Office the FCA’s lack of objectivity and self denial of the problem only serves to emphasise how critical the need for a resolution is.”
