The Treasury Select Committee (TSC) has told trade bodies to be more vocal with their concerns about regulators and urged the industry to be the drivers of better regulation.
In its report on the proposed Financial Conduct Authority, which will take over some responsibilities from the FSA at the end of the year, the influential committee addressed the complaints it had heard about the FSA.
It said: "The industry has complained a great deal about the shortcomings of the regulator in recent years, focusing on alleged unnecessary costs, bureaucracy, high-handedness and an excessively legalistic approach.
"If Parliament is to respond to these concerns it is incumbent on the industry to provide the evidence that different regulatory behaviour is in the public and consumer interest."
The MPs also suggested the upcoming upheaval would provide a opportunity for trade bodies to work more closely with regulators.
"The regulated industry, and particularly the trade bodies, should be more forthcoming about their concerns. A new regulator, led by a new Chief Executive, provides an opportunity for a better relationship-it should be seized," it added.
The committee also acknowledged the "wealth of private criticisms" it had received about the FSA, adding they had been reluctant to speak out publicly "on the grounds that it might prejudice their working relationship with the regulator".
"We appreciate that firms will be reflecting their own interests in what they say, but the scale and substance of the criticisms makes it improbable that they do not reflect an underlying problem," it concluded.
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