LONDON (Reuters) - The head of Britain’s new financial watchdog lacks adequate experience in the core role of protecting consumers and will need to demonstrate he will improve choice, British lawmakers said.
The Financial Conduct Authority (FCA) formally starts in April as part of a shake up of supervision designed to plug gaps and failings highlighted by the financial crisis.
Britain is trying to draw a line under a litany of mis-selling scandals spanning two decades, covering home loans, pensions and more recently, loan insurance.
John Griffith-Jones, former Europe chairman of accounting firm KPMG KPMG.UL, will be the FCA’s part-time non-executive chairman.
He was grilled by parliament’s Treasury Select Committee late last year on his appointment and a report on the proceedings was published on Friday.
“His professional background lacks deep experience of some of the consumer-oriented conduct issues that will be a major part of the FCA’s work,” the report said.
The FCA’s board must restore credibility to the conduct of regulation after the Financial Services Authority (FSA), which is being scrapped, failed consumers, it added.
“The challenges that Mr Griffith-Jones faces should not be underestimated. He will need to demonstrate that he has grasped their scale,” the report said.
The FCA has two core objectives: protecting consumers and ensuring there is enough choice in financial markets.
“We will expect the FCA to demonstrate that it is doing everything it can to make the authorisation of would-be new entrants to the banking sector as fast and straightforward as possible,” the committee said.
FSA Managing Director Martin Wheatley will be chief executive of the FCA.
The FSA said the new watchdog is committed to demonstrating it is delivering on its objectives, including competition.
“The FSA is already conducting its first study, looking at how markets in general insurance products sold as ‘add-ons’ may weaken competition and drive poor consumer outcomes,” the FSA said. It has also created an FCA executive post for developing the approach to competition.
Reediting by David Holmes