MPs have severely criticised the Financial Conduct Authority (FCA) for recent blunders but the watchdog avoided a vote of no confidence in the House of Commons last night.
The "blundering" FCA was called "weak, toothless and anaemic", according to Reuters.
However, the motion to hold a vote of no confidence was not eventually held after minister Harriet Baldwin urged MPs not to support it.
The motion was tabled by Conservative MP for Aberconwy Guto Bebb and backed by Labour MP John Mann and SNP MP for East Renfrewshire Kirsten Oswald.
It said: "This House believes that the Financial Conduct Authority in its current form is not fit for purpose; and has no confidence in its existing structure and procedures."
However, being a backbench motion, any vote would not have been binding.
Reuters reports Mann told the Commons the FCA had been weakened in recent months with the removal of consumer champions from the organisation. He said the FCA had been "neutered" by the "Big Brother" finance ministry and Bank of England.
Baldwin said the watchdog was "operationally independent of the government" and its new chief executive Andrew Bailey was "excellent", the report added.
The debate covered the regulator's involvement in trying to resolve the collapse of the Connaught Income Series 1 Fund.
Connaught entered administration in September 2012 after the collapse of its Income Series 1,2 and 3 unregulated collective investment schemes (UCIS), which provided credit lines to stricken bridging lender Tuita, a firm that also went into administration in September 2012. About £118m was invested in the scheme.
Negotiations had been underway with the fund's liquidator and operators Capita Financial Managers and Blue Gate Capital but after numerous delays the regulator last March decided to investigate the operators instead.
Bebb also based his motion on the regulator's handling of the interest rate hedging products misselling scandal, which resulted in banks paying out £2bn in compensation to small businesses.
In 2012, the FCA identified failings in the way that some banks sold structured collars, swaps, simple collars and cap products, collectively referred to as interest rate hedging products.
Nine banks were involved which agreed with the FCA to review their sales of IRHPs made to unsophisticated customers since 2001, starting in May 2013.
Bebb acts as chairman of a cross-party group of backbench MPs whose aim is to prompt a solution to the problems created by the misselling scandal.
In December the regulator further added fuel to the fire when it pulled its investigation into culture at the UK's biggest banks, a decision, it later emerged, could have been overseen by an official at the Bank of England.
The independence of the FCA's board was called into question by an independent review published by the FCA in January, which found the board's powers with respect to making independent decisions were limited, and external interventions "can have dramatic effects on the organisation".
