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Equitable collapse is massive failure for the regulators

Without wishing to speak out of turn on this one, could we direct a polite

reminder to the Treasury and FSA? They have launched an all-singing

all-dancing review of financial services but haven&#39t they missed the point?

There is an insurance company, haemorrhaging money and members with

massive consumer detriment. It may be reduced to little more than a shell

in the next few months in a protracted and painful process. The only

beneficiaires will be some of the biggest pension providers which might

just get enough business to get stakeholder to add up.

Equitable Life was forced to close its doors to new business on the back

of a court ruling but it has become clear it had not been reserving

adequately for a decade. This is a massive failure for the old board but,

with respect, it is also a massive failure for the regulatory authorities –

the FSA, the Treasury and the DTI.

The legal and accountancy professions also ought to do some soul-searching

about their word-of-mouth recommen-dations which they thought saved them

from anything vulgar such as commission.

The FSA was, as far as we know, on schedule to complete its internal

invest-igation but in a Parliamentary answer put out late on a Friday, the

Treasury announced a delay until the autumn.

We suggest that the Government devotes some of its considerable resources

obviously being spent on reviewing and researching to take a proper look at

what went wrong so it does not happen again. The Treasury should publish

the internal FSA inquiry as soon as possible. Then there should be a public

inquiry to look at what went wrong.

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