Global: New powers a threat for Financial Conduct Authority

Regulatory independence would be “very rapidly” eroded and the City’s competitiveness undermined if contentious plans to allow the Treasury to intervene in financial regulation go ahead, the Financial Conduct Authority has warned.

Richard Lloyd, interim chairman of the authority, warned MPs it would be the “impression in the marketplace” that the government was interfering if proposed powers to allow ministers to direct regulators to make, amend or revoke rules on matters of “significant public interest” were implemented.

“Even if it’s used very sparingly . . . the perception that comes with the ability of ministers to direct independent regulators will go to undermining our independence. We have been very clear to ministers that this is of great concern to us,” he told the Treasury