Mark Hoban, the Treasury financial secretary, has defended the FSA's "pre-empted" response to a recommendation by the Treasury Select Committee (TSC) to delay the Retail Distribution Review (RDR) by one year, saying it does not mean the regulator considers itself unaccountable to Parliament.
Hoban was this morning giving evidence to the TSC as part of its inquiry into the role and powers of the incoming Financial Conduct Authority (FCA).
Mark Garnier MP asked Hoban whether the FCA would take its accountability to Parliament more seriously, given that it appeared to reject the committee's call for an RDR delay earlier this year without due consideration.
Hoban said today: "Generally, they [the FSA] are very aware of their accountability and they take the challenge from the TSC very seriously."
"There are a particular set of circumstances around RDR that make it difficult to draw a general conclusion."
Garnier suggested the FSA had shown itself to be unaccountable as a result of its quick response to the TSC's recommendations.
Further exploring the issue of accountability, Garnier also asked when the Treasury would use its power to launch independent inquiries into cases of consumer detriment, something it has never exercised under the Financial Services and Markets Act.
Hoban accepted the existing power was seen as a "nuclear option" and said new powers would rely on "objective triggers" so that the Treasury would not necessarily have to exercise discretion.
This, he added, would mean they would be "sufficiently often so that they do not cause a huge stir".
During the hour-long hearing, Hoban was also questioned about the powers the FCA would have to improve consumer confidence and protection.
He highlighted the product banning powers, as well as the ability to publish warning notices, but insisted it was not possible to create a "zero-failure" regime.
"It is a regime where consumers and management need to take responsibility for their actions," he added.
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