UK’s financial regulators face more scrutiny over their policies for consumers and the economy from the Parliament. Under the proposals from members of the House of Lords, a new independent body could track progress against certain metrics, and elected officials will also have more scope to probe their actions. These proposed changes are to the draft legislation that will form the blueprint for the UK’s post-Brexit financial rules.
The proposals could reignite last year’s debate about regulators’ independence. After a series of clashes, the Treasury dropped plans to insert a power for ministers to intervene over the actions of the Prudential Regulation Authority and Financial Conduct Authority.
Several members of the House of Lords are looking at ways to increase oversight based on objective criteria. They believe that regulators will gain new powers because of Brexit, requiring new processes for Britain’s parliament to oversee them.
One proposal from Conservative peer George Bridges is for a new watchdog: the Office for Financial Regulatory Accountability. The peer stated that regulation needs to be “robust, proportionate and consistent.” He wants to make sure there is a level of accountability to deliver on that.
The new body could be similar to the Office for Budget Responsibility, created in 2010 to provide independent analysis of the UK’s public finances.
Jonathan Hill, a fellow Conservative lawmaker who carried out a review for the government on ways to modernize the UK’s listings regime, supports the creation of an independent body to hold regulators to account. He stated that he doesn’t see that as a challenge to the independence of regulators, but as something objective that would build confidence in the overall system.
“I don’t see that as a challenge to the independence of regulators, but as something objective that would build confidence in the overall system,” Reuters quoted Hill as saying.
Sharon Bowles, who sits in the House of Lords and was previously a member of the European Parliament, is also calling for extra powers for Britain’s parliament due to the complexity of financial services and their importance for Britain’s economy.
The House of Lords will begin a debate about the possible changes Wednesday. They could be added to the financial services and markets bill if they attract enough parliamentary support.
The draft legislation is due to come into force in the Spring, covering areas ranging from crypto rules to access to cash for consumers. One of its biggest areas is setting the direction for UK after Brexit.
