The British financial regulator asks the government not to create obstacles

Written by Hugh Jones

LONDON, Oct 12 – The UK's new financial services law should not hinder the Financial Conduct Authority's ability to act quickly or undermine its independence, the acting head of the watchdog said on Wednesday.

Financial Services Secretary Andrew Griffiths said on Tuesday he would not interfere with the operational independence of the Financial Conduct Authority and the Bank of England, but would propose a “safety value” to allow the Treasury to intervene if there is a significant public interest.

Griffiths said the wording of the new authority, which has not yet been finalized, will be presented in the coming weeks in a draft Financial Services and Markets Bill before Parliament.

Prime Minister Liz Truss has promised to “liberalize” the City of London's financial sector through a package called “Big Bang 2.0” which includes more radical changes in areas such as insurance, where regulators have shown some hesitation.

Richard Lloyd, acting chairman of the Financial Conduct Authority (FCA), told reporters on Wednesday that his board was proud of the independence of the regulator, which is widely respected, well understood and emulated internationally.

“It is very important that we have mechanisms that hold us accountable, but that does not hold us back, and it does not prevent us from being more flexible and more able to intervene when necessary,” Lloyd said.

The watchdog is being revamped to act more quickly after being criticized for being slow to stop fraud and mis-selling.

Lloyd said the bill's interference power “is of particular concern.”

The Bank of England's Financial Policy Committee said in its quarterly statement on Wednesday that the stability and predictability of British rules will remain crucial given the size of its financial system.

The committee said that the operational independence of regulators is an essential part of the regulatory system, adding that it will consider the implications of all amendments to the draft financial services law once details are available.