Peers and MPs and have accused the City watchdog of being in a ‘state of denial’ over its failings after a ‘disappointing’ response to criticism.
A report in November by the All-Party Parliamentary Group (APPG) on Investment Fraud and Fairer Financial Services found the Financial Conduct Authority (FCA) is viewed as ‘incompetent at best, dishonest at worst’.
In a 358-page dossier, the group accused the financial regulator of poor treatment of whistleblowers, defective organisational culture and a lack of transparency and accountability.
It came after a series of financial scandals including the collapse of former stock picker Neil Woodford’s fund and a fraud case at London Capital & Finance, which left hundreds of thousands of consumers out of pocket.
Now, the APPG has said the FCA failed to respond to the allegations outlined last year.
And in another report yesterday, MPs and peers questioned the regulator’s claim that 85 per cent of stakeholders believe it is protecting consumers.
Bob Blackman, the Tory co-chairman of the APPG, said ‘There was always the chance the regulator might respond in a disappointing, dismissive and defensive way, and if so, that would point once again to it being in a continued state of denial – seemingly unable to absorb evidence-based criticisms being made of it.’
Labour peer Lord Davies, vice-chairman of the APPG, said: ‘Our APPG is merely stating that the evidence shows the FCA has problems that need addressing.
‘The red flag we are continuing to wave vociferously should not be ignored and we’ll keep waving it until it isn’t.’
An FCA spokesperson said that its board discussed the findings of the December report. Chairman Ashley Alder offered to meet members of the APPG in January.
‘We have made significant changes since the events featured in the original report took place and we do not recognise the characterisation of the FCA in the report,’ the spokesperson said.
‘Where there are further lessons to learn, we will take this forward as part of our ongoing work to continuously improve.’
Members of the APPG also raised questions over the future of the organisation, saying it may need to be split up.
FCA top brass have previously dismissed suggestions that the regulator should break itself up.
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