A City lawyer launched an extraordinary call for the government to “take back control” of the regulator yesterday after Jeremy Hunt rounded on the FCA over its plans to name firms under investigation.
The Chancellor told the FT he hoped the Financial Conduct Authority (FCA) would “re-look” at its decision to make public the subjects of its ongoing investigations.
The rare intervention was welcomed by City of London trade bodies, including UK Finance, whose chief exec earlier this week said the watchdog’s plans would “undermine our financial services industry and leave us as an outlier internationally.”
An influential group of peers also wrote to the FCA chief Nikhil Rathi two weeks ago urging him to halt the plans, warning they could hurt “blameless” companies.
However, one City lawyer went further and called for the government to overrule the regulator.
“It’s better late than never but this is but the tip of the iceberg,” said Harvey Knight, UK head of the financial services regulatory group at Withers. “Whichever government is in office will need to take back control of the FCA for the sake of the UK’s economy and its international competitiveness.”
The FCA is “exceeding its statutory objectives in pursuit of what it considers to be its best interests without any balancing considerations”, Knight added. The comments from a regulatory lawyer underscore the scale of the fury surrounding the FCA’s plans, first published in February.
However, despite the scale of the backlash, Hunt’s intervention has unsettled some in the City due to the regulator’s independence from government.
Regulatory lawyer and former FCA official Matthew Nunan, said while he shared the views of Hunt, the intervention was “both interfering and unnecessary”.
Hunt and Sunak were reported earlier this week to be “fuming” about the plans as they look to boost the regulator’s focus on growth and lift the appeal of the City as a place to do business.