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Sants: New regulator to get stronger powers over the banks

FSA chief executive Hector Sants says the Prudential Regulation Authority will be given new powers to withhold future bonus and dividend payments by UK banks and should be allowed to make public its investigations into banking failures.

In an interview with the Financial Times, ahead of a conference in London today setting out the future role of the PRA, Sants says the new prudential regulator will have powers to withold bonuses and dividends if it believes they will undermine the institutions’ capital adequacy and risk management.

Sants. who will become head of the PRA when the FSA is split into two next year, said the new authority would need investigative powers to avoid a repeat of the recent failure to make public the FSA’s report into RBS.

Sants said: ‘When a bank failure does occur, based on some trigger, maybe the commitment of public money, it would be appropriate that the PRA does deliver a report…We want to move away from the difficult situation in which the FSA found itself with RBS.’

‘We are extremely keen to get real clarity from stakeholders about what the PRA should and should not be doing,’ he added.

He also wants to require banks to make public detailed information on their holdings – data that is currently only seen by the regulator.

Earlier this month the Treasury select committee announced Sir David Walker and Bill Knight are to review the FSA’s report into the collapse of Royal Bank of Scotland.

The report was originally expected in March but has been delayed due to legal wrangling between the bank’s lawyers and the regulator over the tone and the content of the report.

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. I feel so much safer now.

  2. Exasperated Me 19th May 2011 at 9:40 am

    More powers, stronger powers – does it make any difference when the same regulators are looking in the wrong direction?

  3. Hector's Pants 19th May 2011 at 10:01 am

    “New regulator”

    ‘Is it a bird? is it a Plane? No, it’s Hector’s Pants

  4. How can this this man just keep giving himself new powers ?
    He just makes it up as he go’s along and a bit rich of him to say he will have the power to stop bonuses and dividends if they see fit.

    Maybe he needs to look closer to home in the bonuses his staff get and the fact that 350 of his staff are paid over 100k per year reward for failure seems to be OK for himself.

  5. Would be better off with sponge bob square pants…

  6. And when the bank phoned the Treasury and threatens to move abroad, and the Treasury phones HS and tells him to lay off, will it be any different? Yeah, right!

  7. HS is like a poor Football Manager – talks a good game but doesn’t actually deliver and is unaware/doesn’t see the ‘foul ups’ his team are committing. Quite rightly so the FSA will be relegated & HS should be as well.

  8. I know of a good job in the IMF that is going which would suit our Hector!

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