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FCA boss invited to UK parliament to address 'naming and shaming' plans

FCA boss invited to UK parliament to address 'naming and shaming' plans

The head of the Financial Conduct Authority (FCA) has been summoned to parliament to explain why work on the regulator's 'naming and shaming' proposal has not been halted.

To serve as a deterrent, Britain’s financial watchdog recently proposed announcing the names of the firms it is investigating – marking a sharp deviation from current protocol, which is to name a firm once an investigation has concluded.

The House of Lords' financial services regulation committee responded by asking Nikhil Rathi, FCA’s CEO, to pause work on the plans, over fears they may tarnish the reputation of firms that are found to be licit.

Last Friday the FCA set out a detailed 29-page defence of its ‘naming and shaming’ plan, asserting its intention to continue working on it.

The committee's chair, Michael Forsyth, said in a letter to Rathi: "The FCA’s response failed to directly address concerns and did not commit to pausing implementation until after our committee had properly scrutinised its proposal.”

As such, the committee is launching an inquiry, with Rathi being invited to appear before parliament. The FCA has made no comment.

In a rare public intervention, Jeremy Hunt, Britain's chancellor, has advised the FCA to reconsider. The Labour Party has noted that the financial watchdog should take into account responses from its public consultation and the sector's views on the proposals.

Comments: (3)

Arshad Noor
Arshad Noor - StrongKey - Cupertino 03 May, 2024, 11:48Be the first to give this comment the thumbs up 0 likes

About time government agencies took responsibility for protecting consumers. Rohit Chopra of the US's Consumer Financial Protection Bureau (CFPB) and Nikhil Rathi (FCA's CEO) appear to be a breed apart from agencies that are captive to corporations and their lobbyists - they are, hopefully, the vanguard of the kind of government consumers dream of.

A Finextra member
A Finextra member 04 May, 2024, 09:23Be the first to give this comment the thumbs up 0 likes

Like Open Data and publishing of the complaints statistics of banks for consumer satisfaction, what is the issue with 'naming and shaming' in this case? Can we the people be asked once please. I will be all in for it. The world needs governments run by corporate, here will be a good start.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 06 May, 2024, 10:03Be the first to give this comment the thumbs up 0 likes

Adding FCA boss Nikhil Rathi to the band of rogue regulators whom I call "Choprandos".

Banking is a confidence trick. The business model of the industry is fragile and works only because depositors think it works. There's no room for casting aspersions on a bank until its culpability is established beyond reasonable doubt (or whatever the legal standard for this industry in UK is.) Early enforcement action in banking is just as bad - or even worse - than late enforcement action.

I totally stand with UK Parliament.