I support whole-heartedly calls for an end to the FSA's statutory immunity from prosecution, not least in light of the current debacle over split-capital investment trusts, following hot on the heels of the Equitable Life scandal.
All promotional literature on split caps was submitted to and approved by the FSA prior to distribution. So how can the FSA now be claiming that any claims of incompetence or culpability on its part are “unfounded”?
And if the warnings circulating about looming problems with split caps were not regarded as such by the Guernsey regulator, then why did the Guernsey regulator see fit to pass them on to the FSA?
And why does the FSA assume that simply because the Guernsey regulator failed to regard the information it received as warnings then it was okay for the FSA to do exactly the same? Or is John Tiner trying to argue that two wrongs make a right?
Most telling of all though is Mr Tiner's apparently angry reaction to accusations of incompetence and to questions over whether or not the FSA should have its statutory immunity revoked.
It seems to me extremely unhealthy that in what is supposed to be a Parliamentary democracy that we have a regulatory body that does what it likes, charges what it likes, imposes what it likes on the industry it regulates and pays its directors what it likes, including nice fat bonuses, regardless of how well or badly it (the regulator) performs its allotted function. Such a system is just plain wrong.
For very obvious reasons, anyone and everyone inside the FSA is going to reject calls for reform of its own shop (hypocrisy or what?) or try to shrug them aside as an issue on which any decision for change is the responsibility of somebody else.
Very probably the powers that be at Canary Wharf see this as the thin end of a most unpalatable wedge and will resist it tooth-and-nail. The words train and gravy spring ineluctably to mind.
WDS Independent Advisers, Bristol