In addition it is pleased that the committee has:
- Asked for more detail about the potential cost of regulation
- Highlighted the importance of proper representation in Europe
- Expressed concern that the current proposals say relatively little about other key segments of the financial sector, including insurance.
- Recognised that inappropriate regulation of non-banking sectors could cause serious damage to companies within those sectors, and to the UK more widely.
- Called for Government to clarify the regulatory impact of its proposals on the non-bank sectors.
- Stated that the job of the regulator is to ensure regulation is effective and proportionate. “That requires a balance between preventing abusive behaviour and ensuring that regulation does not impose excessive costs and restrictions. Financial markets are primarily about the management and pricing of risk, not its removal.”
- Argued that the CPMA should have competition as a primary objective and strongly urge the Government to drop the title of ‘consumer champion’ from the CPMA, arguing that branding it as such would be inappropriate, confusing, and potentially dangerous.
Peter Vipond, director of financial regulation and tax at the ABI said: “We are pleased that the Treasury Select Committee has said that the reforms to the UK regulatory system must be right and not rushed.
“The ABI has argued consistently that insurers need to be properly recognised in the new architecture, as distinct from banking. Their report rightly points out that the current proposals say relatively little about other key segments of the financial sector, including insurance and has asked for further clarification of the impact on other sectors.
“It is crucial that the UK is represented effectively in Europe to make sure that regulation is joined up and proportionate.
“We agree that change is needed and will keep working with the Government to make sure we get these reforms right.”