Treasury Committee chair Nicky Morgan has slammed the Financial Conduct Authority (FCA) for “flat-out and wrongly” refusing to bring commercial lending into regulation, arguing that loans to small and medium sized enterprises (SMEs) should be regulated.
The former financial secretary to the Treasury slandered government after it refused to support proposals from her committee intended to protect SMEs.
A report from the committee published last autumn called for more regulation in order to prevent a repeat of the RBS scandal, involving claims that employees in the bank’s global restructuring group were making SMEs go into liquidation to boost the firm’s balance sheet.
Furthermore, the committee called for a specialist tribunal system to handle complex disputes. However, this call was rejected by government.
Morgan said: “The Committee also called for the introduction of a Financial Services Tribunal for SMEs to settle disputes with their bank that will be too complex for the FOS under its new remit.
“There is cross-party support to provide enhanced protections and improved access to justice for SMEs, so it’s disappointing that the Government will not pursue our recommendations.”
The Treasury Committee chair concluded by stating it will “continue to scrutinise SME finance, regulation and redress”.
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