Two of the major challenges facing the incoming chair of the FCA are Brexit and cryptocurrencies, his predecessor has warned.
Speaking at an event in the City yesterday, outgoing FCA chair John Griffith-Jones reflected on the regulator’s first five years.
The Treasury appointed Bank of England adviser and former lawyer Charles Randell as the FCA’s new chair in January. He takes up the position next month.
In his speech, Griffith-Jones outlined the major challenges he considers face the regulator in the next five years, the first being Brexit.
Griffith-Jones acknowledged there had been calls from some for the FCA to take a more opinionated stance on Brexit. He said he endorses FCA chief executive Andrew Bailey’s “measured” public comments and his “intense and influential activity” in private.
FCA’s Bailey pushes for regulator cooperation over Brexit transition
He said: “The FCA will, after all, need to be there regulating, whatever the outcome. One thing is clear in my mind, I have no time for any sort of regulatory race to lower standards. On the contrary, I believe that the FCA’s excellence as a regulator is crucial in facilitating the City’s successful future in a Brexit world.”
Griffith-Jones also recognised technological advances, in particular cryptocurrencies, as a challenge for the regulator to tackle.
He said: “The hot topic of the day is what to do about cryptocurrencies, to which on the one hand the official sector does not wish to afford the status of a currency, but which are being advertised to the consumer as alluring investments on billboards in Canary Wharf.”
He added: “Therefore have all the potential of causing consumer harm unless brought within the regulatory perimeter.”
Griffith-Jones also highlighted the relationship between the legal and regulatory process as being a challenge and also said last on his “to-do list” was the relationship between the regulator and the regulated.
He said: “Whilst considerable progress has been made since the dark days of 2008, there is, by general consensus, still a long way to go. We, the FCA, will continue to put the conduct agenda high on your list of priorities, but the real agent of change, culture, remains largely under the control of the firms themselves. Or, put more succinctly, in the short-term you get the regulator you have, in the long-term you will get the regulator you deserve.”
