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FSA must come out of its trench to avert industry war

The ABI has attacked the FSA using language reminiscent of the Cold War.

For insurers to talk of a “fight to the death” underlines how relations have soured. Money Marketing might not have used such language but it gives qualified support to the message.

UK savings are at risk of being reviewed and regulated out of existence.

But the problem is more fundamental than simple capitulation to the consumer lobby. If all the Consumers&#39 Association views were accepted, with-profits would face root and branch reform but polarisation would be safe and a sensible system for mortgage regulation implemented.

The problem is more that the ragbag of reports, reviews and submissions are used selectively – most recently and disgracefully the consumer panel&#39s approval to justify an unworkable plan for mortgage regulation. Ron Sandler, prejudging and thus bizarrely undermining his own review, promises more disruption.

To make matters worse, the atmosphere generated by the worst of the national press is not far short of hysteria, making it doubly hazardous for the regulator to use devices such as naming and shaming or public warnings.

For its part, the ABI needs to offer more than Saltr, or Saltr needs to offer a more comprehensive package, as its solution to these problems whether real or perceived.

But it would be facile for the regulator or the Government to use pension misselling or endowment problems to justify every badly thought out policy. Regulation cannot work if a significant section of industry withdraws its consent.

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