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Turner says political uncertainty a “fact of democratic life”

The Financial Services Authority chairman Adair Turner said the Conservative party’s proposal to scrap the FSA increases uncertainty for the industry but added that it is simply a fact of democratic life.

At the FSA annual public meeting in London today, Turner said: “Faced with that uncertainty the FSA’s task is simply to concentrate on ensuring that we have the regulation, the supervisory processes, the people and the skills required to deliver a more stable financial system in future.

“These things will be required whatever the division of responsibility between different institutions results from, whatever the electorate decides.”

FSA chief executive Hector Sants added: “I hope that regardless of any changes to the high-level regulatory architecture in the UK that the culture, the people, and the operating model that we have created here at the FSA will continue to provide the effective supervision that society requires.”

City law firm CMS Cameron McKenna partner Paul Edmondson says although Sants didn’t specifically refer to the Tory proposal to abolish the FSA, a large part of his speech was aimed at justifying the continued presence of FSA as the single regulator of financial services in the UK.

He says: “He gave some good examples of scenarios where a split of prudential and conduct of business regulation between different regulators makes little sense. However, the focus on UK regulatory structure is a distraction from the real issues for the industry. 

“As Mr Sants acknowledged, the ability of FSA or any other regulator to deliver on its objectives depends on their ability to influence international organisations such as the Basel Committee and the European Commission. For the benefit of the UK financial services industry it would much better if regulators and politicians could focus on those challenges, rather than getting caught up in a UK power struggle.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Isn’t two decades enough?…
    The FSA (nee SIB) has been around isnce 1985. Do the readers believe regulation a la FSA has improved the industry? Has it improved the lot of the ‘consumer’? Has it been of real benefit to anyone? If you share my view that things have become worse as a result of the culture which pervades within the ranks of the regulators and the box ticking mentality of the ineqperienced and unqualified people the Leviathan employs then we are overdue a real change, as long as consumer choice is increased rather than what we face in the long term which is five shades of grey.

  2. Julian Stevens 23rd July 2009 at 4:03 pm

    Turner says political uncertainty a “fact of democratic life”
    Says Lord Turner “the FSA’s task is simply to concentrate on ensuring that we have the regulation, the supervisory processes, the people and the skills required to deliver a more stable financial system in future.” Wot ~ like the FSA and its predecessors have manifestly failed to do for the past 20 years? Under the FSA, the stability of the UK’s financial systems is currently in a more parlous state than at any time in the nation’s history. All the FSA seems to want is more (of our) MONEY, MONEY, MONEY, as if that will be the solution to all its failings. We need a new and better regulator, which many would argue the FSA will never be, and a regulator of that regulator. If democracy facilitates the creation of a better regulator, then the next General Election cannot come soon enough.

  3. Justification the name of the game
    Good report from the Adam Smith institute “regulatory myopia” read it at – adamsmith.org

    Regulation has wreaked havoc cost enormous amounts of our money and our clients money all for the outcome we have now and will be paying for by way of increased taxes, lower public spending and a lower standard of living for many years to come. But not of course for quango executive who have done rather nicely thank you.

  4. Steven Farrall 24th July 2009 at 9:22 am

    Try The ‘So What’ Test
    He’s right, but so what? The uncertaintly will manifest itself in regulated businesses questioning the FSA’s authority. They (we) will say, ‘Now hold on a minute, you’ll likely be gone in 10 months so why should we do any of this stuff, or pay more taxes to you?’. In other words the uncertainty is within the FSA and the regulators, not within the regulated industry at all. Furthermore one of the key complaints about the FSA is that it has always exhibited very poor legal certainty; its bureaucratic judgements exhibiting a high degree of arbitrarines. Sants is wrong about stability. It’s government policies (international as well as domestic) that have caused instablity, exacerbated by the actions of their lapdog regulators and their bureaucratic inadaquacies. A plague on all their houses.

  5. Regulatory jobs
    It seems to me that both Adair Turner and Hector Sants still seem to think that the failed systems and processes, together with the people who dreamt them up, should continue, just in some other guise.

    They still don’t understand that they and their procedures and systems are part of the reason we are in this mess. Just moving lock stock and smoking barrel over to the B of E is NOT what this is about. The system has failed! Looks like they are already punting for their own and their employees jobs. This should NOT be allowed to happen. They need to take responsibility for their failures, if this means going on the dole then so be it. (I bet that Hector and Adair have large golden parachutes in place much like Fred ‘the shred’ so they won’t be inconvenienced too much.

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