Monetary Conduct Authority boss says MPs’ criticism ‘not truthful’

The boss of the UK’s monetary watchdog has stated criticism from MPs that it has did not reform after years of scandal is “not truthful”.

Nikhil Rathi, chief govt of the Monetary Conduct Authority, stated it’s “tackling monetary crime… on a scale that has by no means been accomplished earlier than within the UK”.

He was responding to a report from a cross-party group of MPs which stated the FCA was “incompetent” and that its tradition has “received worse reasonably than higher”.

It additionally accused the FCA of failing to correctly examine the banks and different monetary organisations it regulates, suggesting it could be too near them.

The report revealed on Tuesday got here within the wake of backlash towards the FCA’s handling of the Neil Woodford investment scandal and different controversies such as its debanking report.

It referenced years of comparable criticism from different studies, together with a 2016 paper from the New City Agenda which stated there was “a deep seated tradition of box-ticking” on the FCA.

The report additionally hit again towards the suggestion that the FCA had modified.

“It’s crucial the reader doesn’t fall into the entice of considering that the FCA… has already resolved the lengthy record of issues the proof that has been painstakingly gathered reveals it has, as a result of it hasn’t,” the report stated.

Nonetheless, in an interview with BBC Radio 4’s Cash Field present, Mr Rathi defended the FCA towards these claims and argued the regulator had improved.

“We’ll all the time keep targeted on enhancing our operational efficiency, however I do not suppose it might be truthful to characterise the place as nothing has occurred,” he stated.

He added that the FCA is making “file numbers of economic crime prosecutions” and that it’s “probably the most advanced shopper safety regimes on the earth”.

The report goes on to state that the FCA might have been “captured”, which means it’s too aligned with banks and different monetary organisations to behave towards them.

It argues there are “unmanaged conflicts of curiosity” inside the FCA due to its position each to guard customers and promote financial progress.

It steered the watchdog ought to be stripped again to a regulator purely targeted on shopper wellbeing – leaving the federal government to concentrate on financial progress.

It additionally steered that the FCA’s management ought to be changed “if mandatory”, calling its present leaders “opaque and unaccountable”.

Mr Rathi stated the difficulty of progress versus shopper safety “requires a debate”, however that Chancellor Rachel Reeves was pushing it to pursue progress.

He accepted that selling progress can imply rising dangers for customers, pointing to adjustments it made to permit extra firms to record within the UK, akin to on the London Inventory Change.

“We had been very clear all through that dialogue over the earlier 18 months that this could deliver extra danger into the system, [but] it was judged that this was mandatory,” he stated.

“That does imply that over time a couple of extra issues will go fallacious, however the danger urge for food within the economic system wanted to regulate to assist the expansion that the economic system wants.”

On the difficulty of accountability, Mr Rathi stated the FCA seems earlier than Parliament and choose committees and publishes extra knowledge than “every other regulator on the earth”.

A Treasury spokesperson instructed the BBC: “Lots of the points explored within the report have been extensively reviewed, and consequently the FCA has made a lot of adjustments.”