Industry regulation by committee

MPs had their first exposure to the new double act in charge of the Financial Services Authority when John Tiner, chief executive, and Callum McCarthy, chairman, appeared before the Treasury Select Committee last month.

They replace Sir Howard Davies, who had combined the two jobs. However, it could have been one person, so carefully did they ensure they sang from the same hymn sheet, while respecting the contrasting roles of executive and non-executive.

MPs were usually impressed by Sir Howard, and his successors, while lacking his flamboyance, also made a favourable impression.

This was an important meeting for the FSA. The Treasury Select Committee is the chosen method for making the FSA accountable for its work, particularly the delivery of its statutory objectives.

The committee seemed at pains to encourage the FSA to take a tough line with miscreants and, in doing so, MPs were strengthening the FSA's hand, rather than undermining it. That said, one or two Labour MPs did display some impatience at the slowness of the investigations launched by the FSA. However, they were brilliantly handled by Tiner who gave them a glimpse into the complexity and thoroughness of the investigation into the split capital investment trust scandal which, if nothing else, showed he was on top of things.

There was, however, little in this hearing for brokers facing the prospect of statutory regulation in 2005. There were predictable comments about the bureaucracy and cost of regulation but they were dealt with by McCarthy who said that, at an average of 1.6% of firms' fixed costs, they were reasonable.

Obviously, MPs do not have brokers' concerns about statutory regulation of general insurance sales. Perhaps a word in the ear of some of them might not go amiss.