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Flight gives FSA low marks for handling of crises

The FSA deserves only six out of 10 at best for its performance in trying to head off regulatory crises before they blow up, according to Conservative Shadow paymaster general Howard Flight.

Flight says while he welcomed the statement by FSA chairman Howard Davies that it is the job of the regulator to identify and avert crises, he believes the FSA has failed in this respect.

Citing examples such as the Equitable Life debacle and the split-cap investment trust crisis, Flight says the regulator must be taken to task for its failure to perform well under pressure.

IFAs say that while Flight is correct in his views, there are other areas such as training and risk-based regulation where the FSA has done well.

Flight says: “As an organisation, you would give it at best six out of 10 because it has been allowing things to happen which should have been prevented.

“Howard Davies has said the role of the regulator is to head off crises before they happen. I could not agree more but the FSA&#39s track record in this area has hardly been impressive.”

Informed Choice managing director Nick Bamford says: “I do not think Howard Flight has been particularly over the top here. Two issues that immediately come to mind where the FSA has not done well are the split-cap situation and professional indemnity insurance.”

The FSA would not comment on the matter.

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