I guess that my blog last Thursday was timely. last Friday Hector Sants, CEO at the FSA delivered the Annual Lubbock Lecture in Management Studies.
UK Financial Regulation: After the Crisis. Interstingly, his speech identified two key drivers that the FSA need to address:
1. Poor prudential rules and polices - something that the FSA and earlier regulators have been responsible for tinkering with since 1988. Conveniently, the EU is cited as the driver behind many decisions. That however has not stopped an element of "gold plating" by UK Regulators since A day - (April 1988).
2. Supervisory practices - ensuring that the prudential rules and policies are adhered to by practioners.
The new approach that is to be adopted is "Outcomes based" and delivered through intensive supervision. Historically, the FSA would be reactive to a problem. Going forwards, I believe that the FSA will be looking for problems BEFORE they happen - proactive rather than reactive - about time too.
We can expect :
More product regulation
Earlier interventions across a sector
Better integrated risk modelling
Greater use of Mystery shopping
Increased site visits
The aim of this is threefold:
To improve the long term efficiency / fairness of the market
Deliver intensive supervision - TCF as an example
Ensure that appropriate redress and compensation is secured to provide a Visible deterrence to those individuals and Firms that transgress.
No comments:
Post a Comment