Britain’s parliament has created a panel of lawmakers to shape or even recommend scrapping rules proposed by financial watchdogs to ensure the benefits of reform outweigh extra costs for industry, a report by a committee of MPs said on Thursday.
Britain inherited the European Union’s financial rules when it left the bloc, and is now transferring their technical elements into handbooks written by the Bank of England’s Prudential Regulation Authority, and the Financial Conduct Authority. The aim is to help regulators, who will amend rules on the technicalities without changing the underlying law, be more nimble in responding to market evolution.
The extra powers for regulators need stronger checks, parliament’s Treasury Select Committee (TSC) said in a report, which added that the task of scrutinising the process would be carried out by a parliamentary sub-committee. “Our approach will be targeted and flexible, with the new Sub-Committee devoted to the scrutiny of financial regulations and underpinned by a new and well-resourced unit of experts and specialists,” said Mel Stride, who chairs the TSC and the new sub-committee.
The TSC holds hearings on top appointments at regulators, but it has no veto. The sub-committee will be able to “send for persons, papers and record”, and make recommendations on proposals, which would be hard for regulators to ignore.
Intervening at the public consultation stage offers “scope for influence through amendment (or indeed pressure to abandon the proposal),” the report said. Work will start immediately with BoE plans to simplify rules for smaller banks.
A new unit will advise the sub-committee and have financial specialists, staff members of the Treasury Committee, and a legal adviser from the Office of Speaker’s Counsel. It will be a single point of contact for stakeholders – making it a likely focus for industry lobbying.