The regulator issued two contracts in the last half year as part of its Economic Consultancy Services Framework for which the then Financial Services Authority (FSA) had put aside £2m-£5m.
One assignment was handed to GHK Consulting, which was tasked with gathering data on firms in consumer credit sectors to identify the main business models and their links to the risk of consumer detriment.
The other was issued to Frontier Economics, which supplied someone to the FCA to work in Frontier Economics’ chief economist’s department for one month.
In total, the FCA appointed ten consultancies under the framework, which took effect from 21 June last year and will run for four years.
The FCA said using external consultancies was a quick and cost-effective way of gaining insight into the industry.
An FCA spokesman said: “The FCA uses external economic consultancies to supplement in-house expertise. Bringing in technical economic support is a sensible, cost-effective and quick approach that gives us greater insight into the industry. This is all the more important for those markets we don’t yet oversee, like consumer credit.”
The consultancy services framework was set up last year to cover external analysis work for the FCA alongside the Bank of England and the Prudential Regulatory Authority (PRA).
It is not yet clear how big the FCA’s share of the agreement will be, however the work will include economic analysis of market failures, competition analysis, and the cost-benefit of regulation.
The FCA said: “We are not in a position to confirm our planned spend under this Framework as we don’t currently have a clear pipeline of future activity.”
The consultancies appointed to the framework are:
Deloitte
Europe Economics
Frontier Economics
FTI Consulting
GHK Consulting
KPMG
London Economics
Oliver Wyman
Oxera
RPI
