The U.K. Financial Conduct Authority opened a review of its regulatory “mission” as the agency looks to redefine itself under a new chief executive officer following a turbulent year.
The regulator said Wednesday that it’s looking to create a “guiding set of principles around the strategic choices the FCA makes” to better inform its day-to-day work and help the industry understand its priorities. Key areas under review include the FCA’s role in consumer compensation, how the agency identifies harm and addresses it, and the scope of its powers.
Former Bank of England Deputy Governor Andrew Bailey took up the role of FCA CEO in July, one year after former chief Martin Wheatley was ousted by then Chancellor of the Exchequer George Osborne. The move came a month after Osborne declared an end to an era of “ever-larger” bank fines, giving rise to concerns that politicians may have too much influence over the regulator.
The government “made us an independent organization and they’ve given us the legislation and our job is” to use it, Bailey said in response to questions at a press conference Wednesday. “This is not about the re-positioning of ourselves as being more pro-firm or pro-consumer.”
The FCA was created in April 2013 after its predecessor, the Financial Services Authority, was split in two in an effort to better manage regulation and supervision of the banking industry following the 2008 financial crisis. Since then, the regulator has faced a number of crises from a debacle about how it handled a press briefing that sent shares of some of the largest insurers plummeting, to a decision to drop a review into banking culture.
Bailey, who became head of the other half of the old FSA, the Prudential Regulation Authority, in 2013 before taking the helm at the FCA, was appointed by Osborne and is viewed by the industry as a safe pair of hands.
The regulator started its review in the summer, with the consultation due to close in January.
The FCA regulates 56,000 firms and has an overall objective set by parliament to make sure the markets it supervises function well. Other areas the regulator is asking for feedback on in its consultation are how the FCA can best protect vulnerable consumers and changes to its handbook to better set out the rules for firms.
“Establishing and embedding a clear mission for the FCA is critical to our success, both as a regulator and to U.K. financial services as a whole,” Bailey said in a statement accompanying the review. “This will improve accountability and transparency of how and why we make the choices that we do.”
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