City watchdog rejects proposals that would give government the power to overrule regulators

The city’s watchdog has criticized proposals that would give the government the power to ignore regulators.

Richard Lloyd, interim chairman of the Financial Conduct Authority (FCA), said the call-in power would “unclearly undermine our independence.”

He added that the FCA had not been consulted about the suggestion and had not seen the final proposals.

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The city’s regulator, the Financial Conduct Authority, says plans to give the government the power to overrule regulators would undermine its independence

Lloyd said: ‘Our international reputation and even our competitiveness in financial services is very clearly based in part on the independence of regulators.’

The government wants to include powers in the Financial Services and Markets Bill to enable ministers ‘to direct a supervisor to make, amend or withdraw rules’.

But Lloyd said it would damage the independence of regulators such as the FCA and the Bank of England’s Prudential Regulation Authority.