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The House of Lords has taken a major step towards improving fairness, accountability and responsibility among the UK’s regulators, says the British Bankers’ Association.
The report by the influential House of Lords Committee on Regulators emphasises the role which regulators should take in improving the UK’s competitiveness in the world economy. The Committee consulted widely and adopted some key industry recommendations. The BBA submitted written and oral evidence to the Lords’ investigation and fully supports the Committee’s key conclusions:- regulators’ statutory remits should be comprised of limited, clearly set out duties, properly prioritised;
- political policy issues remain the responsibility of Government, not of unelected regulatory bodies;
- regulators’ operating costs should be scrutinised regularly by a select committee, the National Audit Office or both;
- they should evaluate and report on the value for money they provide;
- more should adopt a principles-based approach to regulation, rather than imposing detailed rules;
- impact assessments should be carried out once rules have been implemented; and
- the efficiency and effectiveness of the Financial Ombudsman Service should be reviewed, including consideration of how it acts as a “pseudo-regulator”.
BBA Chief Executive Angela Knight said: “Regulators are responsible not only to their public but also to the organisations they regulate and the Government which empowers them. This report sets out practical remedies for those regulators that are failing any of these constituencies.>/p>
“We were gratified to see the Committee has adopted some of our key recommendations. It is to be congratulated for conducting such a through analysis of the issues and providing such a range of imaginative solutions.”
Background
The report UK Economic Regulators is published by The Stationery Office and can be downloaded at http://www.parliament.uk/parliamentary_committees/lordsregulators.cfm.
The BBA’s written evidence to the House of Lords Committee on Regulators is published at http://www.parliament.uk/documents/upload/British%20Bankers%27%20Association%20200702 %20ONLINE.pdf and its oral evidence at http://www.parliament.uk/documents/upload/correctedEv1120070508.pdf.
Among the BBA’s specific recommendations were: that a full review of the Financial Ombudsman Service’s role be undertaken; that rule changes be subject to regulatory impact analysis; that principles-based regulation be more widely adopted; that a system be developed for scrutinising regulators’ operating costs; and that regulators be provided with statutory remits to reflect that political policy issues and prioritisation remain the responsibility of Government.
