The UK’s financial regulators should be free of political interference, according to MPs.
A Treasury committee report said a proposal to give ministers oversight of new regulations by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) before they are enacted should not go ahead.
The report explained that the independence of regulators from political interference is “arguably one of the reasons why the UK is a world-leading financial centre.”
The report said the committee does not believe there is “compelling evidence to justify changing the law to allow ministers the absolute right to see financial services regulators’ policy proposals before they are published for consultation”.
The committee concluded that regulators must be free to choose what they share with the Treasury.
The report also recommended that the Treasury should consider how the decision-making processes of the Financial Ombudsman Service would interact with the future regulatory framework for the FCA.
Mel Stride MP, chair of the Treasury committee, said: “As the UK forges a new post-Brexit future, the government’s approach to financial services regulation will be critical. It needs to get the balance right between effective scrutiny and ensuring that the regime is nimble and light touch where possible.
“It is not a good use of parliamentary time for MPs to be required to amend or pass new legislation every time regulators wish to make changes. Our regulators are well-equipped and should play a key role in designing the rules they enforce.
“Retaining the independence of our financial services regulators from political interference is essential to ensuring the UK remains a world-leading financial centre.”
Earlier this week, the Treasury opened a consultation on access to cash.