Minister pans 'after-the-fact' regulatory changes

A shadow minister has hit out at the changes already being made to the Financial Services Authority (FSA) and the regulatory landscape before Parliament has a chance to legislate on them.

The Financial Services Bill, which will replace the FSA with the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), is currently in its initial Committee stages in Parliament.

However, the FSA has already drawn up plans to set up two independent bodies within the organisation from April, focusing on conduct and prudential regulation.

Meanwhile, the Bank of England's new Financial Policy Committee, which will be responsible for identifying, monitoring, and taking action to remove or reduce, systemic risks, has already held its first meetings.

Speaking during the first meeting of the Financial Services Bill Committee today, Chris Leslie MP, the shadow financial secretary to the treasury, was critical of the fact the changes had been made before the legislation could be put in place.

"It is slightly unfortunate that we find ourselves legislating for changes when they have already occurred in reality.

"We're debating something here after it's already taken place. In a sense we feel that Parliament is not at the crest of a wave here but mopping up in the wake of decisions that have already been taken."

He also warned it could put pressure on politicians to avoid influencing changes which have already been made.

Mark Hoban, the financial secretary to the Treasury and fellow member of the Committee, defended the pace of change and insisted none of the changes were "irreversible".

"I would be the first to say Parliament should be free to express it view on this and should not be bound by institutional changes that have been made at the moment," he added.

The government is aiming for the Financial Services Bill to gain Royal Assent by the end of 2012, and for the new system to be operational in early 2013.