Britain’s financial watchdog, the Financial Conduct Authority (FCA), has come under attack from former small business owners who have complained about being mistreated by big banks.
According to Reuters, during questioning from the Treasury Committee, the former business owners said the FCA was unable to handle serious complaints against the lenders it regulates.
The questioning comes before a parliamentary debate on compensation for victims of banking misconduct.
Nikki Turner, who helped reveal one of the largest financial frauds in Britain at the Reading branch of HBOS after it destroyed her family firm, was asked what would have been the best course of action following the regulator’s investigation into malpractice at the Royal Bank of Scotland.
“Sack the FCA and start again,” responded Turner, who now heads the SME Alliance, a small business group.
Turner also said that the FCA’s objective to protect market integrity could prevent it from properly protecting consumers.
This is just one criticism that the FCA has faced over its handling of allegations that RBS pushed thousands of struggling firms into bankruptcy. One issue has been the watchdog's reluctance to publish a confidential report it had commissioned into the scandal.
Earlier this year, U.K. lawmakers published a report that detailed how RBS mistreated companies that were struggling during and after the financial crisis.
“The findings in the report are disgraceful,” Nicky Morgan, chair of the cross-party Treasury Select Committee, told Reuters. “The overarching priority at all levels of GRG was not the health and strength of customers, but the generation of income for RBS, through made-up fees, high-interest rates and the acquisition of equity and property.”
Lawmaker Martin Whitfield, who will lead this week’s debate in parliament, said in a statement that the government needs to force the FCA to pass the next phase of the RBS investigation to an independent party.
“I do not believe the FCA can allow an investigation of this magnitude to be taken in-house,” he said.
A spokesman for the FCA said it works to protect the interests of individuals, businesses and for the entire U.K. economy, and supports the committee’s inquiry.
“Over the past few years we have secured billions of pounds in redress for SMEs and consumers — and where we see breaches, we have, and will, take tough action,” said the spokesman.