FCA Mission document consultation

The Financial Inclusion Centre submitted a response to the FCA’s ‘Mission’ document consultation. We are very encouraged that the FCA is consulting on its mission. The document itself is very helpful for communicating the FCA’s priorities and how the FCA approaches its work.

In particular, we are very pleased about the greater emphasis now placed on vulnerable consumers. We support the view that resources should be concentrated on vulnerable consumers who are less able to withstand the impact of market failure or consumer detriment. This is more evidence that the FCA is adopting a more consumer-focused regulatory culture.

But we raised concerns about the FCA’s emphasis on what is known as ‘information asymmetries’ to explain market failure in financial services. Regulators have made numerous attempts in the past to use information disclosure to in the hope that this would empower consumers and make markets more competitive, efficient, and ensure firms treat consumers fairly. This has not been effective and the renewed emphasis on information disclosure is a regressive step.

We argue that it is more effective for the FCA to use more direct regulatory interventions to control market behaviours and corporate practices which harm consumers.

The FCA is making greater use of ‘market studies’ to understand how best to intervene in markets. These market studies are slower, less responsive and open to greater challenge by industry lobbies than more direct, quicker regulatory interventions.

To download our response click here: FCA mission condoc Financial Inclusion Centre submission final