Has FSA failed in Treating its Customers Fairly?
The Treasury Select Committee investigating the Northern Rock debacle yesterday grilled FSA chairman Sir Callum McCarthy on the regulator’s role in the recent banking crisis.
McCarthy refused to answer questions about whether he thought the Bank of England should have stepped in and made more funds available earlier in order to avert a crisis. Comparing McCarthy with boxer Sugar Ray Leonard, Labour MP Sion Simon accused him of being a “world class ducker and diver”.
Mike Jones, director of the pension education website MyCompanyPension.co.uk said, “The FSA has trumpeted loud about regulated firms such as insurers and financial advisers not taking quick enough steps to meet its Treating Customers Fairly programme. Yet the example it appears to have set in the recent banking debacle shows it needs to examine its own systems. It smacks of a ‘do what I say, not what I do’, and must really ruffle the feathers of firms that are striving to adopt the TCF initiative”.
At a previous meeting of the TSC, McCarthy had said that the systems and methods used in financial crises by the tripartite system, which includes the FSA, the Bank of England and Treasury, would “need re-examination”. But at yesterday’s meeting, John McFall chairman for the TSA rounded on McCarthy accusing him of not answering a number of questions about the way in which the respective bodies actually co-ordinate. McFall said the tripartite system is ‘the biggest cock-up for 140 years’.
Jones says, “The FSA sets out its objectives as three broad headings: promoting efficient orderly and fair markets; helping retail consumers achieve a fair deal; and improving its business capability and effectiveness. Yet what appears to be coming out of the Select Committee hearing from the FSA is anything but fair and orderly. Where is the FSA’s own TCF now?”
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