Financial Conduct Authority (FCA) chief Nikhil Rathi will this week face a grilling by MPs as pressure mounts over the regulator’s plans to ‘name and shame’ firms it is investigating.
Rathi will be questioned over the proposals – which have provoked a fierce City backlash – at the Commons Treasury select committee tomorrow.
The row centres on plans by the FCA which would mean it is more likely to name those firms it is investigating.
At present it only does so in exceptional circumstances. But under the proposals it would be open about investigations if it is deemed in the public interest.
The plans have upset the City while Jeremy Hunt has said that he hopes the watchdog reviews its decision – leaving Rathi increasingly isolated.
FCA boss Nikhil Rathi will be questioned over the proposals – which have provoked a fierce City backlash – at the Commons Treasury select committee tomorrow
Opponents say the proposal will damage UK competitiveness at a time when London is fighting to keep hold of its status as a financial centre.
A coalition of financial sector lobby groups wrote to Mr Hunt last week to attack the plans.
The battle is set to take centre stage when Rathi, alongside FCA chairman Ashley Alder, appears before MPs.
They are likely to be asked to respond to the criticism and if their plans will be affected by the backlash.
A Lords committee is also set to summon Rathi at a later date. Peers on that committee are already furious with the FCA, which it claims has so far failed to address the concerns it has raised.
However, Rathi has the backing of one major public figure – the former Treasury select committee chairman Lord Tyrie, who says that if it appears that consumers are being ripped off ‘then disclosure is likely to be in the public interest’.
The select committee hearing will also see the pair questioned about the FCA’s wider work.
That includes a motor finance probe that could cost the industry up to £16billion – drawing comparisons with the mis-selling of payment protection insurance (PPI) that cost lenders £50billion.
The FCA is looking into whether customers were overcharged for motor financing arrangements between 2007 and 2021.