Liz Truss, the Foreign Secretary and frontrunner to be next Prime Minister, plans to create a merged financial ‘super regulator’, according to a new report.
Ms Truss, who is running against former Chancellor Rishi Sunak to be PM, is believed to be planning a major shake-up of financial services regulation, according to sources quoted by the Financial Times.
Conservative Party members will select their next leader, who will then become PM, by early September.
The sources told the Financial Times that Ms Truss may merge the Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA), and Payments Systems Regulators (PSR) into a single unified body. The FCA and PSR already share offices and resources in London.
Any merger would be the biggest change to financial regulation since former Chancellor George Osborne’s dissolution of the Financial Services Authority in 2013 following his criticism of the former regulator for its handling of the 2008 financial crisis.
The FCA has come under criticism for its handling of several financial scandals and business failures in recent years.
The watchdog has been heavily criticised over how it has responded to the British Steel Pension Scheme (BSPS) scandal, with MPs accusing the regulator of having “inadequate” oversight of the firms involved.
In 2017, many British Steel workers were advised to transfer out of their defined benefit pension into a defined contribution pension, typically a personal pension or a Self-Invested Personal Pension (SIPP). The scandal has attracted national attention and criticism.
By transferring to a private pension arrangement, the BSPS victims would have potentially lost benefits already built up in the British Steel Pension Scheme.
The regulator was also recently accused of acting too slowly and accused of a cover-up over it’s handling of the failed Blackmore Bond scheme.
Ms Truss has made reform of the regulators, the Treasury and the Bank of England a key aspect of the financial and economic aspects of her campaign.
