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People demand stronger financial watchdog

People demand stronger financial watchdog

Category: Money

Updated: 03/11/2011
First Published: 03/11/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The majority of people do not think that the Financial Services Authority (FSA) has done enough to help them.

Consumers think that the watchdog has not done enough to stand up to banks and did not exert its power sufficiently, research from Which? shows.

Figures show that almost three-quarters (73%) of consumers think that the FSA wasn't effective at standing up to banks in the run-up to the financial crisis and eight in ten (82%) feel the financial watchdog needs to have more power to force the banks to change.

And despite widespread agreement that a regulator is needed to ensure that customers are treated fairly, just a third of people think that the FSA has managed to deliver this for consumers.

But it's not all down to the regulator, as bank customers are adamant that their providers need to do more to regain their faith in them.

More than three quarters of people think the banks cannot be trusted to regulate themselves and there is hope that the new Financial Conduct Authority (FCA) will be more effective in keeping financial institutions in check.

The FCA will be responsible for overseeing retail institutions when the FSA is split up.

Banks need to do far more to regain customers' faith in them as three quarters of people (76%) don't think that banks can be trusted to regulate themselves.

Which? chief executive, Peter Vicary-Smith, said it represents a 'once in a generation' opportunity to get regulation right.

"People are crying out for a strong financial regulator that fights on their behalf," he added.

"The FCA has the potential to stand up for consumers' interests, but it will need to be tough and proactive.

"The new regulator must act to stop commission driven sales, tackle poor products and should hand down fines and punishments that act as a real deterrent against bad practice by the banks."

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