THE Financial Services Consumer Panel, the watchdog set up by the Financial Services Authority, has strongly welcomed the launch today of the successor consumer regulator, the Financial Conduct Authority (FCA).

The panel said it believed the FCA had the powers needed to introduce an era of "more effective regulation" as its operational objectives gave it a strong consumer protection mandate.

Following the criticisms of the FSA's failures to enforce its "treating customers fairly" principle, the panel is expecting "a renewed and meaningful focus by the FCA on ensuring the industry treats its customers fairly".

It wants higher penalties to remove firms' incentive to engage in damaging practices and to act as a deterrent to other firms, vigorous deployment of resources and powers to promote effective competition, and a commitment to the issue of access to financial services. It also wants "effective prioritisation so that the new regulator is not overstretched and can focus on key emerging risks".

Adam Phillips, panel chairman, commented: "It has taken three years to translate the government's ideas on regulatory reform into the reality of the new FCA. We have already been encouraged by [chief executive] Martin Wheatley's bold statements and the new organisation's commitment to taking a more forthright approach to regulation."