MPs set to question role of new City watchdog

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The Independent Online

Even before it has opened for business the new City regulator is to be investigated by MPs. Andrew Tyrie, the chairman of the Treasury Select Committee, launched an inquiry into the remit and powers of the Financial Conduct Authority yesterday.

It will take over regulatory responsibility for financial firms by the end of 2012 but Mr Tyrie wants to establish accountability to avoid it being "ineffective and costly". "This is a golden opportunity to establish how the FCA can best be held to account."

The remit of the new regulator has come under fierce criticism from insurers and investment firms. They consequently welcomed news of the inquiry. Maggie Craig of the Association of British Insurers said: "It is absolutely crucial that there is clarity on accountability."

Richard Saunders of the Investment Management Association said: "This is the right time for a close examination of how the new regulator can best meet its responsibilities."