The Treasury Select Committee is a cross-party committee of MPs that investigate treasury matters.  This includes Banks and the Financial Conduct Authority, Prudential Regulation Authority and the Bank of England.  They were also previously the very powerful Banking

Standards Commission (though the commission included numerous other influential people, such as the Archbishop of Canterbury), which recommended many of the significant changes seen in banking since 2008’s crash.

On Monday 25 July 2016 the Treasury Select Committee issued a number of documents that should be of interest to anyone interested in financial regulation, banking and British economics & politics.

1. Review of the reports into the failure of HBOS; Fourth Report of Session 2016–17. Click HERE^[1] for the report and click HERE for an article about it.This report is, as would be expected, principally a consideration of what lessons have been learned about the collapse of HBOS and what recommendations have been implemented and, more importantly, what recommendations have not been implemented and consider why this is the case.  This report re-emphasises that HBSO’s collapse was in most ways unique to HBOS because of how badly it had been run.  This has been reconfirmed by the regulators’ investigations: Para 22.The most significant issue raised in this report is the view that the FCA still cannot keep up with enforcement actions to a degree expected by the Committee^[2].  In 2013 the Banking Standards Committee confirmed that one of the reasons for the UK bank collapse was that the former regulator the FSA simply could not keep up with everything gin its remit.  Three years later and the committee now confirms that the FCA simply has not kept up.  See my detailed article on this.

2. Treasury Select Committee letter to Bank of England/PRA dated 21 July 2016 about conflicts of interest (click HERE)^[3].
   See comment below.

3. Treasury Select Committee letter to Financial Conduct Authority dated 21 July 2016 about conflicts of interest (Click HERE)^[4]One of the biggest criticisms of the financial regulator in the original HBOS investigation^[5] was that there were far too many conflicts of interest between the regulator and the regulated.  One of the HBOS executives sat on the FSA board.  The Committee’s Chairman, Andrew Tyrie, has now written to the two regulators to ask them what they have done since November 2015 to tackle this problem.  Worth keeping an eye on this one, it could be interesting.

Resources:

 [1] Treasury Select Committee Review of the reports into the failure of HBOS; Fourth Report of Session 2016–17

http://www.publications.parliament.uk/pa/cm201617/cmselect/cmtreasy/582/582.pdf

[2] Chapter 5, page 36 “Enforcement – The way ahead”

[3] Treasury Select Committee letter to Bank of England/PRA dated 21 July 2016 about conflicts of interest

http://www.parliament.uk/documents/commons-committees/treasury/Correspondence/Letter-to-Mark-Carney-Bank-of-England-21-07-16.pdf

[4] Treasury Select Committee letter to Financial Conduct Authority dated 21 July 2016 about conflicts of interest

http://www.parliament.uk/documents/commons-committees/treasury/Correspondence/Letter-to-John-Griffith-Jones-FCA-21-07-16.pdf

[5] FCA & Bank of England November 2015 “The failure of HBOS plc (HBOS)”

http://www.bankofengland.co.uk/pra/Documents/publications/reports/hbos.pdf