LONDON (Reuters) - MPs accused the country’s financial watchdog on Tuesday of failing to volunteer details about how it operates and takes key decisions affecting millions of investors.
The Treasury Select Committee clashed repeatedly with John Griffith-Jones, chairman of the Financial Conduct Authority over requests to share privately the watchdog’s internal workings.
MPs had requested information about internal audits, legal opinions used to base decisions, and voluntary arrangements with banks put together to avoid court costs.
“We are fed up,” Andrew Tyrie, chairman of the committee, told Griffith-Jones at a hearing in parliament.
“There is deep disquiet about the slow and the apparently obstructive approach we have had on a number of issues that we have raised,” Tyrie said.
The FCA was launched last year to shake up supervision found wanting in the run up to the 2007-09 financial crisis when British taxpayers had to shore up several lenders. The committee seeks to make the FCA publicly accountable for its actions.
“We do need to get to a better place quickly and for that we need a good deal of cooperation that we have not always seen in recent months,” Tyrie said.
Griffith-Jones said he accepted full accountability for the watchdog’s decisions after they had been taken but he was nervous about giving up a “protected” space at the watchdog for people to work in while the decisions were being made.
Shedding a “spotlight into that in real time” made his job more difficult, Griffith-Jones said.
In sometimes testy exchanges, the watchdog was asked for reassurances that “dark pools” or off-exchange securities trading was not abusing investors in Britain.
British bank Barclays (BARC.L) is being sued by the New York attorney general for allegedly lying to clients about its dark-pool platform used for high-frequency trading, an accusation the bank is challenging.
Martin Wheatley, the FCA’s chief executive, said that the UK and European stock market was very different from that in the United States but that he could not give an assurance that abuse alleged in U.S. dark pools would not take place as trading strategies changed daily.
“We have to monitor them on an ongoing basis,” he said.
Committee member Mark Garnier asked the FCA to look into the “prevalent” practice of accounting and consultancy firms seconding staff to banks for free.
These undeclared “gifts” were worth about 50,000 to 100,000 pounds and given in the hope of winning business from a bank.
“We have rules about conflicts of interest, but I am not aware that this is a prevalent activity,” Wheatley said.
“I am informed that is more prevalent than you imagine,” Garnier replied.
Reporting by Huw Jones; Editing by Hugh Lawson