The Treasury Committee has published responses from Tracey McDermott, former Chief Executive of the Financial Conduct Authority (FCA), and Andrew Bailey, former Deputy Governor for Prudential Regulation, Bank of England, and former Chief Executive of the Prudential Regulation Authority (PRA), to a number of questions on crowdfunding regulation.
Mr Tyrie, chair of the committee, wrote to Ms McDermott and Mr Bailey on 1 June 2016, to ask whether consumers would benefit from further regulation of the peer-to-peer lending market.
Commenting on the correspondence, Mr Tyrie said:
“On the basis of this correspondence, the risks associated with crowdfunding platforms appear to be restricted to those using the platforms to lend or invest.
Government policies to promote the crowdfunding sector may have the right intention – to increase competition in the SME lending market – but government tax incentives, in effect government subsidies, may be encouraging some consumers into the use of inappropriate products. The FCA needs to be alert to these risks. The Government may need to reconsider these tax incentives.”
The statement of the Treasury Committee as well as the related documents can be found here.