- 13 Mar 2013 at 12:09 PM
New British Regulators May Not Have Done Any Better Than The FSA, But It Was Totally Worth The Trouble Of Setting Them Up AnywayBy Jon Shazar
As you may have heard, the U.K. is putting the FSA out to pasture at the end of the month. In its place on April 1 will sit the Prudential Regulation Authority—success guaranteed by the name alone—and the Financial Conduct Authority.
Why was this necessary? To quote the man who made it happen, Chancellor George Osborne, “When a system of regulation fails so spectacularly, people are going to ask what replaces it.” This question was not asked of the equally spectacular failures of the Securities and Exchange Commission, but no matter: Neither President Barack Obama nor Congressional Republicans got elected promising to junk the SEC. But the Tories did promise to get rid of the FSA, and so it must go, making it two British governments in a row that have decided to start financial regulators from scratch.
By splitting the duties of the Financial Services Authority, policy makers hope to separate the daily monitoring of banks’ financial health from the policing of illegal activity like insider trading. The goal is to allow the separated regulators to focus on their own areas, instead of trying to cover everything from banks’ capital buffers to market abuse…
“When we look back, last year will be seen as the low point,” said Martin Wheatley, who will take control of the Financial Conduct Authority after six years with the Securities and Futures Commission, the regulator in Hong Kong. “The time is right; we can rebuild from here.”
While the U.S. reacted to the financial crisis with a whole raft of new powers and responsibilities for its regulators, the U.K. chose to simply distribute existing powers. This has not exactly put the fear of God in Britain’s potential wrongdoers.
“Regulators never had a lack of powers — they had an unwillingness to use them,” said Bob Penn, a regulatory partner at the law firm Allen & Overy in London. “Regulators failed, not the regulatory structure.”
Both Mr. Bailey and Mr. Wheatley admit the new regulatory structure may not have stopped the recent failures that have blackened London’s reputation as a financial hub.
- New British Regulators May Not Have Done Any Better Than The FSA, But It Was Totally Worth The Trouble Of Setting Them Up Anyway March 13, 2013
- Don't Get Caught On "His" Side: A Survival Guide For Pimco Employees March 7, 2014
- Bonus Watch '14: Bank of America Just Couldn't Let Brian Moynihan Have This One March 7, 2014
- Bonus Watch '14: JP Morgan Whistleblowers March 7, 2014
- New Crop Of MBA Candidates Thinking They're Pretty Hot Shit March 6, 2014
- University Of Chicago Economics Department Suddenly Too Good For Fabrice Tourre March 4, 2014
- Area Barber Quits Creativity-Stifling Goldman Gig, Enjoys New And Previously Unthinkable Freedom To Cut March 6, 2014
- Stanford Graduate School of Business Goes Back In Time, Rejects Mathew Martoma March 5, 2014
- Guy Who's Short Herbalife Says Guy Who's Long Herbalife Saying Guy Who's Short Herbalife Saying Herbalife Is A Fraud Is A Fraud Is A Fraud March 13, 2013
- For Every 10 Times He Calls Employees Stupid Losers, Softbank CEO Offers One Warm Embrace March 7, 2014
- Executive Editor
- Bess Levin
How Can We Help You?
- Send tips to:
- For tech issues email:
- For advertising or events email:
- For research or custom solutions email:
- Dealbreaker is published by Breaking Media.
For a full list of our sites, services and staff visit breakingmedia.com