Mass mis-selling on the scale of the payment protection insurance (PPI) debacle will not be possible under the Financial Services Authority's replacement, the man who will head up the body has said.
Martin Wheatley, current managing director of the consumer and markets business unit at the Financial Services Authority (FSA), and who will become head of the new Financial Conduct Authority, said the FCA will be better at protecting consumers from mis-selling and poor products.
Wheatley today told the Treasury Select Committee (TSC) the FCA will scrutinise new products at an earlier stage in their design to improve consumer outcomes.
He said the FCA, had it been in place at the time, would have tackled the PPI problem far earlier than the FSA did.
"We would have been looking at the production of PPI and its governance and analysing its profitability," said Wheatley, pictured.
"If we saw profits of 70%, we would have been intrusive."
Hector Sants, chief executive of the FSA, said the FSA has very different powers of intervention to those the FCA will have.
"We could have done the research [into PPI], but we did not have the same philosophy then," he said.
Margaret Cole, managing director of the FSA's conduct business unit, added the new regulator will have the power to ban products if it believes they are damaging to consumers.
Wheatley's comments come after the FSA and the Office of Fair Trading published landmark guidance on designing PPI today.
'Right thing to do'
£69m spent on upgrades
European fintech market 'underserved'