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Britain to give lawmakers veto power over banking regulator appointment
[LONDON] British finance minister George Osborne said he would give parliament the right to veto future appointments to run the country's Financial Conduct Authority, which has sweeping powers over the banking industry.
Mr Osborne also said chief executives of the FCA would be subject to a fixed, renewable, five-year term although this would only apply for the successors of Andrew Bailey, who takes over as CEO in July.
Mr Osborne made the comments in a letter sent to the head of the Treasury Select Committee (TSC) in Britain's parliament, which reviews monetary and financial policy.
Some of the lawmakers on the committee have expressed concern that the FCA was being politicised after Mr Osborne ousted its first chief executive, Martin Wheatley, last year by refusing to renew his contract.
Mr Wheatley was a hardliner in regulatory terms and Mr Osborne wanted a "new settlement" with banks, widely interpreted as seeking a more accommodative stance with the sector.
In future the TSC would make a recommendation to parliament on the person put forward by the finance ministry to head the FCA.
"Parliament will now be better placed to safeguard the FCA from interference - or the perception of interference - by the Treasury or Treasury ministers," the TSC's chairman, Andrew Tyrie, said in a statement on Tuesday.
Mr Wheatley was replaced by acting CEO Tracey McDermott, who announced last week she would also be leaving the watchdog once Mr Bailey takes over in July.
"Giving the committee a veto over hiring and firing the FCA chief executive will achieve little in advancing the regulator's objectives," said Simon Morris, a financial services partner with law firm CMS.
"Needing committee approval will merely politicise the appointment, requiring the candidate to field grandstanding questions with crowd-pleasing sound bites," Mr Morris said.
Efforts by some lawmakers to give parliament veto powers over appointing the head of the Prudential Regulation Authority, the Bank of England's banking supervisory arm, had not mustered enough support.