The Financial Policy Committee (FPC) is an official committee of the Bank of England, modelled on the already well established Monetary Policy Committee. It was announced in 2010 as a new body responsible for monitoring the economy of the United Kingdom. Focusing on the macro-economic and financial issues that may threaten long term growth prospects, it was expected to be officially set out in legislation during 2012. Although early plans were for the interim (pre-legislation) FPC to meet in late 2010, the committee's first meeting was held in June 2011. As of March 2012, the FPC is expected to take over operational responsibility for managing the financial sector from the Financial Services Authority with legislation planned for 2013.
Once operational, the committee, headed by the Governor of the Bank (currently Andrew Bailey), will address any risks it identifies by passing on its concerns to a new Prudential Regulation Authority (PRA), which will be obliged to act. Plans for the committee were set out in George Osborne's first Mansion House speech in June 2010, along with the creation of the PRA and a Consumer Protection and Markets Authority (CPMA, later renamed the Financial Conduct Authority, or FPC). Minutes of FPC meetings are made available, a move intended both "to increase transparency and to help transmit messages to the City". After legislation is passed, the FPC will be fully accountable to Parliament
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Our role
Financial markets must be honest, competitive and fair so consumers get a fair deal. We work to ensure these markets work well for individuals, for businesses, and for the growth and competitiveness of the UK economy.
We do this by:
- regulating the conduct of nearly 45,000 businesses
- prudentially supervising around 44,000 firms
- setting specific standards for around 17,000 firms
We focus on reducing and preventing serious harm, setting higher standards and promoting competition and positive change.
We were established on 1 April 2013, taking over conduct and relevant prudential regulation from the Financial Services Authority (FSA).
We work across the UK with a head office in London, offices in Leeds and Edinburgh and colleagues in Belfast and Cardiff.
Why we do it
Financial services play a critical role in the lives of everyone in the UK, from junior ISAs to pensions, direct debits to credit cards, loans to investments.
How well financial markets work has a fundamental impact on us all.
UK financial services employ over 1.1 million people and, alongside related professional services, contribute an estimated £100 billion in tax per year.
Based on our policy and enforcement work, we estimate that we add at least £11 of benefits to consumers and small businesses for every £1 we spend.
If UK markets work well, competitively and fairly they benefit customers, staff and shareholders, and maintain confidence in the UK as a global financial centre.
How we regulate
We work towards our objectives in a variety of ways.
- We make new rules and issue guidance and standards.
- We work to detect market-wide harm and put in place remedies through market studies.
- We authorise or register financial firms and individuals.
We use a proportionate, risk-based approach to regulation. We prioritise the areas and firms that pose a higher risk to our objectives, taking into account the size, complexity and potential impact on different types of consumers.
We’re also maximising the use of data and technology. This ensures our intelligence is better joined up, and we can move faster to identify and act against firms and individuals who are more likely to cause harm.