(Adds more detail)
By Huw Jones
LONDON, April 19 (Reuters) - British finance minister GeorgeOsborne said he would give parliament the right to veto futureappointments to run the country's Financial Conduct Authority,which has sweeping powers over the banking industry.
Osborne also said chief executives of the FCA would besubject to a fixed, renewable, five-year term although thiswould only apply for the successors of Andrew Bailey, who takesover as CEO in July.
Osborne made the comments in a letter sent to the head ofthe Treasury Select Committee (TSC) in Britain's parliament,which reviews monetary and financial policy.
Some of the lawmakers on the committee have expressedconcern that the FCA was being politicised after Osborne oustedits first chief executive, Martin Wheatley, last year byrefusing to renew his contract.
Wheatley was a hardliner in regulatory terms and Osbornewanted a "new settlement" with banks, widely interpreted asseeking a more accommodative stance with the sector.
In future the TSC would make a recommendation to parliamenton the person put forward by the finance ministry to head theFCA.
"Parliament will now be better placed to safeguard the FCAfrom interference - or the perception of interference - by theTreasury or Treasury ministers," the TSC's chairman, AndrewTyrie, said in a statement on Tuesday.
Wheatley was replaced by acting CEO Tracey McDermott, whoannounced last week she would also be leaving the watchdog onceBailey takes over in July.
"Giving the committee a veto over hiring and firing the FCAchief executive will achieve little in advancing the regulator'sobjectives," said Simon Morris, a financial services partnerwith law firm CMS.
"Needing committee approval will merely politicise theappointment, requiring the candidate to field grandstandingquestions with crowd-pleasing sound bites," Morris said.
Efforts by some lawmakers to give parliament veto powersover appointing the head of the Prudential Regulation Authority,the Bank of England's banking supervisory arm, had not musteredenough support. (Reporting by William Schomberg and Huw Jones, editing by DavidMilliken and Susan Fenton)