Prudential Regulation Authority chief executive Andrew Bailey has hit out out at the former FSA regime, claiming the regulator failed because it lacked accountability and clear objectives.
Speaking at a Lansons Communications Future of Financial Services conference in London today, Bailey said the new regulators must be more directly accountable to parliament.
He said: “The challenge we have is in getting a clear public policy objective to stick. The only way we can do that successfully is that we have very clear objectives from parliament and we have very clear accountability to parliament. I think the system that was put in place in 1997, the FSA, did not succeed in that respect and did not have clear objectives.
“In a sense the conclusion is it had too many objectives and it did not have a clear line of accountability to parliament. If you do not have those things in place then you are far more at risk of failing than if you do. That is the real lesson in terms of what worked post-1997 and what did not.”