Liberal Democrat Lord Newby says the financial services industry needs to work harder to try to influence regulatory policy at a European level.
At a conference held by thinktank Reform in London last week,Lord Newby, who is LibDem Parliamentary Treasury committee co-chair, argued that, given the regulatory power shift to Brussels and the fact that few politicians understand sectors such as asset management, it is up to the industry to make a concerted effort to influence policy.
Newby said: “One thing that the financial crisis has demonstrated is that while financial institutions understand the international dimension of regulation, politicians are hopeless at it. Responses on a global level are extremely weak and responses on a European level are not that much better. The problem is that no politician’s career depends on getting a successful international response to something.”
Newby said the industry needs to put more effort into lobbying politicians and also spend more time getting to grips with how the European framework operates.
But he believes that the regulator and Government also have a role to play.
Newby said: “The industry, the Government and the FSA have been lamentably poor on knowing who the people are at the European level that are making the decisions.
“My single plea would be to think really hard about how you influence from within rather than just knocking on the door and saying, excuse me I think you have got it wrong.”