The Financial Conduct Authority’s (FCA) strategic objective will be to protect and enhance confidence in the UK financial system.
Amidst growing pressure for the Financial Conduct Authority (FCA) to change their objectives from MPs, the FSA, the Independent Commission on Banking (ICB) and consumer groups, the Treasury financial secretary, Mark Hoban, has defended the FCA’s aims.
The FCA’s strategic objective will be to protect and enhance confidence in the UK financial system according to proposals in the draft financial services bill. The FCA will also set out to provide suitable protection to consumers, to protect and enhance the integrity of the financial system and to promote efficiency and choice in the market.
There have been many objections raised; Sir John Vickers, chairman of the ICB, voiced that the bill’s confidence objective is too focused on beliefs about the market rather than the way it functions. Adair Turner, FSA chairman, told the TSC that the strategic objective should be about efficiency, fairness and consumer protection rather than confidence.
Last week the chair of Consumer Focus, Christine Farnish, informed the TSC that following their report around competition and choice in the banking sector, the confidence objective could stop the regulator intervening in problems in case it undermines consumer confidence.
Hoban rejected Consumer Focus’s claims, stating that the work of the regulator must take into account its operational objectives which make building false confidence difficult: “You cannot prise apart the strategic and operational objectives. The strategic objective is the umbrella statement about the role of the FCA. It is the operational objectives which give the meat to the bones and set out what the FCA will be doing.”
Hoban will take all concerns around the bill’s objectives into consideration for the final bill which will go before Parliament at the start of next year.