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Lord Flight ‘horrified’ by warning notice publication plans

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22/08/2012
Plans to allow the new financial regulator to publish warning notices about enforcement action have been branded as “unjust and dangerous” by a Conservative peer.

The Financial Services Bill, which is currently making its way through the House of Lords, will give the Financial Conduct Authority (FCA) the power to publish the notices without even having to consult firms, and the plans have received strong backing from consumer bodies.

However, the proposal has already been criticised by the Treasury Select Committee, and Lord Flight has now added his voice to the concerns.

“The Bill enables the FCA to publish warning notices before there has been any sort of a fair hearing, and I think that is completely wrong, unjust and dangerous,” he said.

The former Investec Asset Management chairman cited the damage done to Standard Chartered after the New York State Department of Financial Services revealed it was investigating the bank, and the fact that George Osborne had expresses concerns about this.

“There’s irony in having a Chancellor making critical statements about the New York regulator’s action when they are bringing in the same powers in the UK,” he added.

With the House of Lords set to resume debate on the Financial Services Bill in October, Lord Flight confirmed he will table an amendment to roll back on the plans to publish warning notices and revealed he had already received supportive emails from colleagues.

He also railed against the position of the Financial Services Consumer Panel, which has strongly supported the current provisions in the Bill.

“There has been a transparency argument but I think what they’ve been blind to is that it is unjust and that once you publish something like that, the individual or institution is finished,” he explained.

“I actually am horrified and I shall be quite robust.”

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