Check the value of new regulation
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First Action Finance head of communications Jonathan Cornell has called for a full cost-benefit analysis of any significant reforms brought in under the new regulatory regime.
The FSA is to be axed, with many of its powers going to a new Bank of England subsidiary by 2012.
A Consumer Protection and Markets Authority will “regulate the conduct of every authorised financial firm providing services to consumers” and a new agency will be formed to tackle white-collar crime.
Speaking at an Aviva round table debate last week, Cornell stressed it was important to ensure that regulatory initiatives introduced under the new structure were not a money-wasting exercise.
He said: “We have treating customers fairly, which I am sure we spent hours and millions of pounds investing into, but I am not sure whether our firms saw a benefit or, more important, consumers saw any benefit.
“Whatever the FSA or its replacement does, I think we should have some degree of cost-benefit analysis so if we are gong to spend a lot of time, effort and money on future regulation is it actually going to stop consumer detriment or is it going to make consumers better off.
“If it is not going to make consumers better off, then what is the point?”
Aifa director Robert Sinclair said regulation under the new structure was likely to be harsher and more draconian but more focused at the manufacturing end.
He said: “I hope we are going to develop a more symbiotic relationship between the regulator and the regulated. If it does fall over, it is going to be interesting because they will have been in the room.”
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