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Alert on staffing by finance watchdog

Confidence in the two new financial services regulators will be at risk unless more is done to attract and retain staff, the public spending watchdog has warned.

According to the National Audit Office (NAO), more than a third of staff at the Financial Conduct Authority (FCA) have less than two years' service at the regulator and its predecessor, the Financial Services Authority (FSA).

And it noted that 26% of those who have resigned from the Prudential Regulation Authority (PRA) were classed as 'high-performers'. Staff turnover at the PRA stood at 11.7% last year, while the figure for the FCA was 9.7%.

The NAO said: "There is a risk this may begin to undermine industry confidence and poses a risk that knowledge within the organisation will be lost."

Following last April's break-up of the FSA, the PRA now undertakes prudential regulation of all banks, building societies, insurers and credit unions, while the FCA is responsible for conduct regulation.

The combined cost of the FCA and PRA is forecast to be £664 million in the current financial year, which is 24% higher than the FSA in 2012-13.

The NAO said the costs should be seen in the context of potential benefits from the regulators acting more effectively to reduce harm to consumers and limiting future taxpayer liabilities.

Amyas Morse, head of the NAO, said: "These are still early days for the new regulators, and there are encouraging signs new approaches are gaining traction.

"Attracting and retaining staff are vital to keeping this progress on track."

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Finance

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