It has been a mixed few months for the City's watchdog.
On the one hand, the Financial Conduct Authority (FCA) has delivered long-awaited reforms to the asset management industry, while its chief Andrew Bailey has made several strong interventions in the Brexit debate, such as pointing out the absurdity of EU negotiators attempting to rule out a deal on financial services.
On the flipside, the FCA’s reforms are still under fire from activists such as Remain-champion Gina Miller, who is threatening to sue the regulator for being too soft and has dismissed the extension of the accountability regime for banks to also cover fund managers as “nothing more than restating the obvious”.
Meanwhile, the saga over the misconduct of RBS’ former turnaround business GRG continues, with MPs across the political spectrum, from the Conservative Treasury Select Committee chair Nicky Morgan to Liberal Democrat leader Vince Cable, voicing their outrage and disappointment at how the regulator has handled the process.
On Monday, the FCA published its business plan for the year ahead, which included £30m for Brexit-related work. While some of this will come from additional fees on financial firms and from the FCA’s reserves, the rest will be diverted from other areas, while Bailey has said it is “not feasible” to add Brexit preparation onto the regulator’s plans without postponing other projects.
Aside from Brexit, the FCA’s remit for the year is wide-ranging. It includes consumer protections, from pensions advice to data security to offers for new versus long-term customers.
All of these are crucial for maintaining trust in the sector, and for ensuring that British financial institutions are able to cope with the changing economic landscape in a way that supports both businesses and consumers. This is true regardless of where the EU negotiations end up, which is why the talk of “reprioritising” other areas in favour of Brexit work could be concerning.
Naturally, leaving the EU will add to workload, but Bailey must not hide behind the burden. The City needs a regulator that is able to tackle an extremely wide range of issues fairly and competently. Brexit cannot be allowed to get in the way of the FCA’s crucial work of overseeing City firms and protecting consumers.
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