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Davies says EU should follow FSA example on consultation

FSA chairman Howard Davies says the European Union should follow his example of extensive consultation with the financial services industry before introducing changes that affect the market.

In a pointed statement, Davies says, unlike Europe, in its drive towards creating a single financial market, the FSA consults extensively before proposing any changes that affect the industry.

He calls this practice of consultation a “very helpful discipline which has contributed greatly to ensuring that our new regime is proportionate and appropriate to achieving its intended aims”,

But Davies&#39 comments have surprised IFAs and lenders who believe they have been ignored in several key consultations. The regulator has issued 109 consultations but advisers believe it has often already made up its mind. Lenders have voiced serious concerns about CP98.

Davies says: “I am entirely behind the principle of a single financial market. But you do not always create the best kind of free market by introducing hasty one size fits all solutions which can have a damaging effect on some life-forms in the market.”

IFA Pensions & Invest-ment Management principal Phil Moore says: “I do not think the FSA consults extensively and when they do I do not think they take a blind bit of notice of what people are saying. There is clearly a hidden agenda. Take polarisation, for example. I think their minds are already made up.”

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