The boss of Britain’s financial watchdog has said criticism from MPs that it has failed to reform after years of scandal is “not fair”.
Nikhil Rathi, chief executive of the Financial Conduct Authority, said it was “tackling financial crime … on a scale never seen before in the UK”.
He was responding to a report by a cross-party group of MPs which said: FCA was “incompetent”. And that its culture has “become worse rather than better”.
It also accused the FCA of failing to properly investigate the banks and other financial organizations it regulates, suggesting it was too close to them.
The report, published on Tuesday, comes amid a backlash against the FCA. Handling the Neil Woodford investment scandal and other disputes Like his de-banking report.
He cited years of similar criticism from other reports, including A 2016 paper from New City Agenda It said there was a “deep-seated culture of box-ticking” at FCA.
The report also hit back at the suggestion that the FCA had changed.
The report said, “It is important that readers do not fall into the trap of thinking that the FCA … has already resolved a long list of issues, as evidenced by the painstakingly collected evidence.” It happens that he doesn’t have it, because it didn’t happen.” .
However, in an interview with BBC Radio 4’s Moneybox Show, Mr Rathi defended the FCA against the claims and argued that the regulator had improved.
“We will always focus on improving our operational performance, but I don’t think it would be appropriate to highlight the position because nothing has happened,” he said.
He added that the FCA was making “a record number of financial crime cases” and that it had “one of the most advanced consumer protection systems in the world”.
The report says the FCA may be “captured”, meaning it is too tied to banks and other financial organizations to take action against them.
It argues that there are “irregular conflicts of interest” within the FCA because of its role to protect consumers and promote economic growth.
He suggested that the watchdog should be relegated to a regulator focused solely on consumer welfare – leaving the government to focus on economic growth.
He also suggested that the FCA’s leadership be replaced “if necessary” and described its current leaders as “vague and unresponsive”.
Mr Rathi said the issue of growth versus consumer protection “needs a debate”, but that Chancellor Rachel Reeves was pushing to put it on the path to growth.
He accepted that boosting growth could mean increased risks for consumers, pointing to changes that have been made to allow more companies to list in the UK, such as on the London Stock Exchange. In the exchange.
“We’ve been very transparent over the past 18 months in discussions that this will add more risk to the system, [but] It was decided that it was necessary,” he said.
“This means that over time some more things will go wrong, but the risk appetite in the economy needs to be adjusted to support the growth that the economy needs.”
On the issue of accountability, Mr Rathi said the FCA appeared before parliament and select committees and published more data than “any other regulator in the world”.
A Treasury spokesman told the BBC: “Many of the matters uncovered in the report have been extensively reviewed, and the FCA has made a number of changes as a result.”