Hector Sants has questioned the value of the FSA carrying out cost benefit analyses on regulations emanating from the European Union.
Speaking at an all party parliamentary group for building societies and mutuals evidence session in Parliament this morning, the FSA chief executive questioned whether they represent value for money for those who pay for the regulator.
He said: “We do currently have an obligation to do a cost benefit analysis on EU directives. I have to say, personally, it is an interesting question if that is a good use of our resources, given we are obliged to implement the directive.
“While we continue to have that obligation we will continue to discharge it but the question is whether or not that is a good use of fee payers money”
He also clarified the regulator’s position following comments made by FSA chairman Lord Turner at a Treasury select committee in November last year suggesting building societies should “stick to their knitting”.
Sants said: “I think there is an unfinished part of our regulatory agenda as to whether we should reverse some of the liberalisation of the building society rules which took place in the 1980s and 1990s.”
Responding to a question from labour MP for Cardiff South and Penarth Alun Michael on Turner’s comments Sants told the group it was right to review regulatory arrangements for building societies as some had taken on extra risk.
He said: “It would not be right to say the building society model has proved itself to be totally immune from the events that occurred in the 07 to 09 period. Clearly there have been cases where individual societies have taken on more risk that was appropriate.
“So I think we cannot draw a conclusions and say we should leave building societies out of a review of whether there are changes to be made to the regulatory environment.”
The Building Societies Association says it is encouraged by the clarification that building society regulation would be part of a wider review of financial services regulation.
A BSA spokeswoman says: “It is encouraging the FSA put into context their earlier comments on increasing building society legislation. It is also encouraging they are keeping an open mind on the outcome of any such review.”