Lords clarify role of regulator

The British Bankers' Association (BBA) believes this to be "a major step towards improving fairness, accountability and responsibility among the UK’s regulators."

The House of Lords' Committee on Regulators consulted widely and adopted some key industry recommendations.

The BBA submitted written and oral evidence to the Lords’ investigation and fully supports the Committee’s key conclusions:

• Regulators’ statutory remits should be comprised of limited, clearly set out duties, properly prioritised;
• Political policy issues remain the responsibility of Government, not of unelected regulatory bodies;
• Regulators’ operating costs should be scrutinised regularly by a select committee, the National Audit Office or both;
• They should evaluate and report on the value for money they provide;
• More should adopt a principles-based approach to regulation, rather than imposing detailed rules;
• Impact assessments should be carried out once rules have been implemented; and
• The efficiency and effectiveness of the Financial Ombudsman Service should be reviewed, including consideration of how it acts as a “pseudo-regulator”.

BBA chief executive Angela Knight said: “Regulators are responsible not only to their public but also to the organisations they regulate and the Government which empowers them. This report sets out practical remedies for those regulators that are failing any of these constituencies.

“We were gratified to see the Committee has adopted some of our key recommendations. It is to be congratulated for conducting such a through analysis of the issues and providing such a range of imaginative solutions.”