The U.K. Parliament’s Treasury Committee released its report on the effectiveness of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) this week, criticizing the bodies for their “inadequate” impact on curbing bank misconduct.
Reports on Tuesday (July 26) said the committee questioned the effectiveness of the FCA and the Bank of England’s PRA, referencing their responses to the near-collapse of British bank HBOS in 2008. Soon after, the bank merged with Lloyds Banking Group.
“The HBOS experience calls for the FCA and the PRA to exhibit greater vigilance and energy if they are to win public confidence,” said Andrew Tyrie, chairman of the committee, in an email, according to Bloomberg. “This has, on occasion, been lacking.”
The committee’s report called for a new enforcement body to be able to effectively punish banks for wrongdoing. Doing so, lawmakers argued, would “bolster the perception” that these regulatory bodies are independent of the banking sector.
The current structure of the FCA and PRA is “outdated and can be construed as unfair,” the lawmakers’ report said, because these bodies supervise banks, as well as prosecute.
The FCA was created only three years ago, and while it may seem that calls for a new regulator are coming soon after such a recent overhaul of bank regulation, this isn’t the first time U.K. lawmakers have called for such action.
According to reports, former U.K. Chancellor of the Exchequer George Osborne heard similar concerns about the structure of bank regulation but dismissed them when he created the PRA and FCA by splitting up the Financial Services Authority in 2013.
Tyrie made similar calls for a new, independent bank regulator that year when he was serving as a member of the U.K.’s Parliamentary Commission on Banking Standards; reports said he again called for a new body in 2014.