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List of shame

Former FSA chief executive John Tiner may have left the regulator before the official onset of the credit crunch, but today he was named one of the 25 individuals most responsible.

A special report in The Guardian said it was Tiner who allowed banks to set their own capital adequacy requirements. It also highlights that it was on Tiner’s watch that Northern Rock dug itself deep into a financial hole.

Others on the black list include Bank of England governor Mervyn King, Prime Minister Gordon Brown, and a whole host of high flying banking execs. Predictably these include HBOS’ Andy Hornby, RBS’ Fred Goodwin, B&B’s Steve Crawshaw and Northern Rock’s Adam Applegarth.

So when will these top dogs of finance face up to the part they played in creating the crisis? Chances are realistically, they probably won’t. And why won’t they? Because the chain of accountability seems to be just a little bit flawed.

The fact that it was the people at the very top of the financial industry in this country who fundamentally got it so wrong, doesn’t stop the repercussions from snowballing down the food chain.

Advisers are feeling the heat from all directions whether it’s higher capital adequacy requirements, liquidity issues or business model changes under the RDR.

To add to the pile, BDO Stoy Hayward’s Financial Services Group is warning that many firms will now have to monitor their financial position on a daily basis and adjust for any risks that have arisen.

Head of capital markets Andrew Richardson says maintaining adequate financial resources in order to comply with the FSA rules will be fundamental for survival.

He says: “Regular monitoring of a firms’ financial position is the only way to ensure that your business will emerge from the crisis.”

Yes it makes sense that businesses keep an eye on their exposure to risk and try to stay well-capitalised, but add this to the daily to-do list and suddenly advisers have very little time for their clients any more.

Probably not what the FSA had in mind as the optimum outcome of its treating customers fairly initiative.


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