The changes include a new independent decision-making committee for the PRA, measures to enhance the accountability of the FCA and PRA’s decision makers, and more constructive communication between investigators and those being investigated, with greater senior involvement by the regulators.
The government also said that the FCA and PRA should publish more information about their criteria for starting investigations, and their approaches to referring cases from supervision to enforcement, with more transparency around how the FCA and PRA co-operate with each other.
The Chancellor George Osborne said:
"A key part of our long term economic plan is to build a stronger banking system that it is better placed to support customers and businesses, with firms and individuals in the industry conducting themselves to the highest standards.
"That’s why we created new financial regulators and gave them stronger powers to protect customers and the integrity of financial markets on which they depend, and we’re committed to ensuring that these regulators can continue to act effectively and decisively.
"Today’s recommendations will enhance the FCA and PRA’s capacity to deal with misconduct or tackle threats to financial stability swiftly, fairly and robustly."