New watchdog aims to prevent finance companies making 'excessive' profits
Mark Leftly is political correspondent at The Independent on Sunday and associate business editor across the Independent titles. He writes a weekly column, Parliamentary Business, published on a Wednesday, that covers politics and the City. He is a multi-award winning reporter and was named Press Gazette's business magazine journalist of the year prior to joining The Independent on Sunday.
Sunday 14 October 2012
The incoming financial services regulator will punish insurers and banks that make "excessive" profits, according to a report due out this week detailing its powers and structure.
The Financial Conduct Authority (FCA), one of the two watchdogs that will replace the Financial Services Authority next year, will have a powerful role ensuring that there is suitable competition in these markets.
The report is expected to show that the FCA will "follow the money", an industry source said.
Martin Wheatley, who will head the FCA, said in a speech to the Association of British Insurers conference last month that ensuring firms are not making excessive profits would be one of the organisation's four key competition roles.The others are making sure that firms develop new products, that they strive to offer better services than their rivals, and that the most successful banks or insurers are those that respond best to consumer demands.
It is not clear how Mr Wheatley will judge what level of profit is excessive, but he is determined to crack down on the sort of practices that resulted in the payment protection insurance mis-selling scandal.
The source added: "The FCA's role will be to make sure competition works well for markets and consumers. It will be more interested in pricing and profitability than market share.
"It will pay increasing attention to those products generating the highest returns."
The report will be expected to clarify how the competition role will work against the revamped anti-monopolies regulator.
The Competition Commission and the Office of Fair Trading are being merged to become the Competition and Markets Authority in April 2014.
However, the FCA will have the power to fine companies that are making too much profit. It is also expected to be able to ban the products if they are deemed to hurt financially the person on the street.
- 2 Watch the Supermoon live: How to see the brightest Moon of the year tonight
- 3 Hulk Hogan wants to be Donald Trump's running mate in the US Presidential election
Caitlyn Jenner car crash: Driver who died in collision sued by surviving passengers for $18.5m
Watch the Supermoon live: How to see the brightest Moon of the year tonight
Hulk Hogan wants to be Donald Trump's running mate in the US Presidential election
Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
Turkey duped the US, and Isis reaps rewards
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...