FCA must deliver a quantum leap in consumer protection

28 June 2011

Kay Blair, vice chair of the Financial Services Consumer Panel, has called for the new Financial Conduct Authority (FCA) to deliver a quantum leap in effective regulation. Speaking at today’s FCA Approach to Regulation Conference, Blair emphasised the need for a proactive regulator which will put consumers at the heart of its regulatory philosophy. It needs to have the appetite and ability to use its new powers.

The Consumer Panel believes that the FCA will have to be confident and transparent in the way it works, clear about its regulatory purpose and its expectations on firms. Above all, it must be committed to delivering good consumer outcomes.

Kay Blair, Vice Chair of the Consumer Panel commented:

“Over the last few years the FSA has undergone a sea-change in behaviour. However, if we are to see the new more effective regulation the Panel has advocated, a quantum leap is now needed. It will be critical for the success of the FCA that it moves quickly and decisively to signal a fresh approach to regulation.
The Panel wants a proactive FCA to address the root causes of misconduct rather than the symptoms of consumer detriment. We want to get rid of the ‘waterbed’ effect, where when the regulator tackles one source of sector-wide misselling, another new problem all too conveniently rises up to replace it. This suggests that the causes are systemic, built in to business models, rather than random events. By addressing suspect business models and potentially toxic products, a more effective regulator will nip problems such as any future PPI in the bud well before consumer detriment escalates and certainly before consumers have lost millions of pounds.”

The FCA needs to encourage and recruit staff who are passionate about – and dedicated to - the delivery of enhanced consumer protection. We want to see the new CEO Martin Wheatley drive an ambitious programme of change building on the success of Hector Sants and Margaret Cole in recent years.”
 

Notes to editors
  1. Kay Blair’s speech can be found on the Consumer Panel website.

  2.  
  3. The Consumer Panel is a statutory body under the Financial Services and Markets Act 2000 and was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA Board on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
  4.  
  5. The emphasis of the Panel's work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA's remit. More information about the Panel's work is available on our website.

  6.  
  7. From the 1st April 2011 there are fifteen members of the Panel as listed below. Panel members are appointed to serve a maximum of two terms of three years. Further information on individual members.
Tuesday, 28 June 2011