The Financial Services Authority (FSA) is acting more as a lobbying organization than an effective regulator for Britain's banks, new report has stated.
According to a study entitled 'FSA: Watchdog or lapdog?' by the World Development Movement (WDM), the body is increasingly using its power and position to help financiers as opposed to censuring their activities.
The WDM blamed the fact that the FSA's board is now primarily made up of professionals who made their name in the banking industry means the authority is "compromised by corporate capture" due to its close relationship with banks.
Furthermore, the anti-poverty campaigning organization criticized the FSA for working under a lack of transparency as it has consistently held private meetings with lobbyists instead of conducting open consultation.
Deborah Doane, director at the WDM, said action should be taken to end this "cosy" situation sooner rather than later.
"We need the FSA to halt its lobbying activity now ... for stronger governance structures to be put in place to avoid corporate capture by the finance sector from the start," she added.
By Tony Aynsley