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Caps off for Sir Howard

Never in the history of the FSA has Money Marketing agreed more with the views of chief regulator Sir Howard Davies.

The last combined chairman and chief executive has told the world he does not believe price caps work.

He chose an ABI conference to say he disagreed with one of the fundamental strands of Government policy, adding that he had not seen price caps work in other industries.

The intervention is timely, coming just as the Government wants to escalate price controls through Sandler and probably child trust funds.

Davies also stuck the boot into the Treasury over its failure to head off full regulation of general insurance from the EU.

At same venue, Davies&#39 lieutenant, Michael Folger waded into Sandler products arguing they will not work without regulated sales – you may strip out the risk but you make it very likely they will not sell, he argued. This sounds like a mini-rebellion from Canary Wharf. But we fear it is only when the chairman is poised to leave that such opinions will be voiced.

Surely Davies privately made clear his opposition to the 1 per cent cap, particularly after stakeholder&#39s stuttering launch. Perhaps the need to bypass this opposition was the real reason behind Sandler.

We hope the new FSA bosses will be free to express concern about Government policies if they believe an initiative undermines efforts to regulate the industry properly. New chairman Callum McCartney has a record of independent thinking as energy regulator but it would be disastrous if he was not free to speak his mind.

One final question. What took you so long Sir Howard?

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