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The watchdog has been asked to prove itselfReuters

The Financial Conduct Authority has not "fully grasped" the enormity of its own failings when it leaked a "pre-briefing" of insurance market reforms to the press last March, wiping billions from the value of UK life offices.

According to Andrew Tyrie, chair of the Treasury Select Committee, the FCA has not learned from its cataclysmic bungle or faced up to "wider problems" which have been identified in an external report into the affair, carried out by Simon Davies of law firm Clifford Chance.

"By breaching its own listing rules, it created a false market in life insurance shares. In doing so it put its own statutory objectives at risk. The evidence from this episode suggests that problems may still exist at the FCA. It is not yet clear to the committee that the FCA has fully grasped this," said Tyrie.

The FCA's dithering decision to over-brief the Telegraph last year about plans to examine problems with exit fees on old pension policies, lopped close to £3bn from the value of insurance firms in a matter of hours.

The FCA admitted the cock-up and the head of enforcement Clive Adamson stepped down along with head of authorisations Victoria Raffe and communications director Zitah McMillan. However, this also took the form of another "contrived media-handling operation".

The report points to "mutliple failures" across the FCA prior to and after its briefing announcement, including at board level.

The select committee wants the FCA to clearly set out where senior responsibility lies and "be able to assure itself and Parliament that it is not suffering systemic weaknesses".

The committee has called on the FCA to publish the results of this work within six months, as a matter of priority.