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Categories:Regulation

Sants warns of 'tick box regulation' from Europe

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FSA chief executive Hector Sants has warned the European approach to supervision risks a return to “tick box regulation”.

Speaking at a British Bankers’ Association briefing in London today, Sants (pictured) said the new regulatory approach of the Prudential Regulation Authority and the Financial Conduct Authority is expected to “abolish tick box regulation”.

He explained that prior to the recent financial crisis UK banking supervision was focused on ensuring banks had enough capital, rather than firm specific risks.

Sants said the new approach will not rely on tougher standards for capital and liquidity, and will inevitably mean a more intensive style of supervision.

He said: “But it should not involve unnecessary data collection and unnecessary questioning. If there is a risk of tick box prudential regulation, it will come from Europe.

“The issue here is that the European approach to regulation is not only to avoid disorderly failure, but also seeks to ensure common standards across Europe. This seems to be creating a ‘bias to data’ and runs the risk of being at variance with the necessity of having customised risk assessments of firms.”

Sants argued the move to the new regulatory framework was not just about supervisors changing their behaviour, but firms too. He said there was a need for firms to “show a greater willingness to proactively comply with supervisory judgements.”

He added: “I am not asking firms to forgo their right to challenge their supervisor if their decisions have not properly been made. I am suggesting that dragging their feet in complying with requests when it is obvious to all that the outcome is in the best interest of society as a whole, is not a behaviour which should survive in the new world.”

The FSA is set to move to a ’twin peaks’ model of supervision within the FSA from April 2 this year, ahead of the move to the PRA and FCA early next year.

Under the new structure Sants will become chief executive of the PRA and deputy governor at the Bank of England.

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Readers' comments (11)

  • I should have thought this would have been "right up Hector's street" as he hasn't seemed capable of doing much during recent times. !

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  • errrr.... just like we have forced down our collective gullets in the UK.

    And to think this jackass is paid such a vast salary to make such pronouncements...

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  • It is terrifying to realse that this man , who has caused untold damage through his total incompetance, is now to become deputy Governor of the Bank of England & could even in the future be made Governor.
    My mind boggles at what further damage he may cause the UK economy.

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  • Seems that our Hector is trying to define his future employment on his own terms. Having done tick box regulation for years, failing, but punishing IFAs, he used to cozy up to all the movers and shakers in the banking and finance industry, only to find out they were using him, and keeping him like a mushroom, he now feels let down, and he wants revenge. He knows he won't achieve this unless his powers are wide ranging.
    Why he is still in his job after admitting failure over and over again, is a testimony to his powers of doggedness. Deputy Governor of the BoE, someone else's head needs testing! How will he survive on a deputys civil servant's salary? Must be less than the P.M.s salary to treat the population fairly.

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  • If Sants is to be come a Deputy Governor of the BoE then all is lost, we are all doomed, this man presided over the lack of banking control and regulation to the detriment of our whole economy and there is no place for such incompetence.

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  • Why is it that these peasants who failed first time around are being awarded a second time to mess it up again at everyone else's expense?

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  • Any chance of a you gov petition to stop Sants being in charge of anything? what do we need 100,000 signatures? shurley he has upset more people that that?

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  • Andy Newman - Set it up and you will have my vote and that of my team.

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  • I'm afraid that all is lost. Financial services has been the bedrock of our economy and with the FSA regulation and the incompetent Hector Sants in charge, confidence in our housing market etc. is 'complianced' out! With no confidence, there is no property market, no property market no investment, no investment no building, no building no growth and no growth - we stay in recession! David Cameron obviously doesn't realise what a liability H. Sants is and that our economy is stuffed with such incompetence.

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  • "Under the new structure Sants will become chief executive of the PRA and deputy governor at the Bank of England"
    Are we to assume that, when considered for these 2 posts? Sants ticked all the boxes?

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