The Financial Services Authority (FSA) failed consumers and the Financial Conduct Authority (FCA) must take a "radically different approach" to regulation, a group of influential MPs has said.
Incoming chair of the FCA, John Griffith-Jones, must restore the credibility of the conduct regulator, the Treasury Select Committee (TSC) has said in a report out today, pointing to a much stricter regime in future.
In a damning indictment of the FSA, the MPs branded the regulator the overseer of a "box-ticking culture whose benefits were far from evident", and said it left consumers exposed to "some of the worst scandals in UK financial history".
The MPs also criticised the board of the FSA for appearing to fail in its oversight function.
Griffith-Jones should not underestimate the challenges he faces as head of the new regulator, the MPs said, adding he and his new board colleagues will need to demonstrate stronger strategic leadership.
The TSC will engage in an oversight role of the governance at the FCA and this will be more demanding than in the past, the MPs said.
MPs also warned that they and parliament will expect the new FCA to respond to TSC requests for information "promptly and thoroughly", in what can be read as a further dig at the FSA.
Griffith-Jones, who has board experience from being both a chief executive and chairman within Big Four accountancy firm KPMG, will work a three-day week as chair of the FCA and told MPs that he sees the future chief executive of the FCA, Martin Wheatley, as "running the show".
However the MPs said that as chairman of the FCA, Griffith-Jones will be required to offer robust board level challenge to the executive leadership of the FCA.
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