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FSA cancels its own internal “effectiveness” review

The FSA has cancelled this year’s review of its own effectiveness, amidst criticism of the failure of “light-touch” regulation to identify risks in the banking system.

The FSA board made the decision at a meeting led by chairman Lord Adair Turner in December, claiming that recommendations for improvement should be left to Turner alone.

The effectiveness of the board and its main committees is carried out yearly, with two consecutive internal reviews and an external review conducted every third year.

An FSA spokesman says a full review was carried out by external consultants for 2007 and reported in the FSA’s annual report and accounts for 2007/08, published in June last year.

He says: “With the transfer of chairmanship from Callum McCarthy to Adair Turner in September 2008 the board felt that some of the recommendations were best left to the incoming chairman.

“This was discussed by the board in December 2008 and as last year was a year of transition for chairs it was decided another review now would add little. We will explain this in this annual report and account for 2008/09 to be published in June.”

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