Members of Parliament took aim at the United Kingdom’s financial regulatory bodies Monday (Feb. 21), alleging they have failed to combat fraud and accused them of being too cozy with financial institutions (FIs), Investment Week reported.
At a hearing before the Treasury Committee, staff from the Financial Conduct Authority (FCA) and Bank of England (BoE) got a scolding. Angela Eagle, a Labor member of Parliament, said that while the FCA has said it plans to improve its fight against financial crime and fraud, it’s been a failure.
“You are at a very, very, very low starting point as fraud has exploded,” Eagle said.
Sheldon Mills, the FCA’s executive director of Consumers and Competition, was contrite.
“We take the criticism, and we will improve,” Mills told lawmakers.
The committee is considering whether the government should add objectives for regulatory agencies designed to consider long-term growth and competition in the market.
Eagle asked if the FCA and the BoE should value the growth in bankers’ bonuses at the same level of the rest of the nation’s economy.
Conservative Party Parliament Member Kevin Hollinrake questioned whether FIs regulated by the FCA and the BoE should be giving these agencies rave reviews. He added that regulators had been criticized for being too slow on approvals while being too weak on enforcement, citing the Woodford scandal.
The FCA has been investigating the events that resulted in the suspension of the LF Woodford Equity Income Fund. It collapsed in 2019, prompting an outcry from investors.
The criticism comes as the British finance ministry plans to require regulators to consider the financial sector’s global competitiveness when writing rules.
Related: UK Adds Focus on Growth in Considering Financial Regulation
Many in the country’s financial sector want the BoE and the FCA to help London stay competitive around the world, which regulators in many other countries already do.
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