Aifa has warned the Financial Conduct Authority must not “take scalps to prove it is tough”, after FCA chief executive designate Martin Wheatley claimed the new regulator will “shoot first and ask questions later”.
Speaking at an Association of British Insurers conference on conduct regulation in London this week, Wheatley set out how the FCA will differ from the FSA.
He said: “The key difference between the future and now, and forgive me for being scary in my use of analogy, is we are being given the power to shoot first and ask questions later.
“Today’s approach is we find a problem and do lots of analysis, we publish a set of draft rules and consult with the industry, then we are told we have got it wrong, and we publish another set of rules. A year later we get to the point where we think we got it right first time. We have got to reverse that process.”
Aifa policy director Chris Hannant says the FCA needs to act fast to minimise consumer detriment, but he says: “It would concern me if the FCA’s mentality was to take some scalps just to prove it is tough. That is not the way the FCA should be regulating.”
Page Russell director Tim Page says: “The key worry is proportionality. It is necessary to go in all guns blazing against banks, but from the point of view of smaller businesses it is an altogether more scary prospect. His comments suggest a quicker route from supervision to enforcement.”
Equilibrium Asset Management investment manager Mike Deverell says: “The trouble is language like this does not help counter the idea of a “them and us” culture. The regulator should be working to safeguard the interests of the industry as a whole, not just consumers.”