Thank goodness for the Financial Services Authority (FSA)!Apologies. Yes, I KNOW I’ve got a bee in my bonnet about bankers - but the more I learn, the more I don’t understand.
Simple question: What is the role of the FSA?
Well, this is what its website says:
“We are the independent body that regulates the financial services industry in the UK”.
“We have been given a wide range of rule-making, investigatory and enforcement powers in order to meet our four statutory objectives. In meeting these, we are also obliged to have regard to the Principles of Good Regulation”.
"We regulate most financial services markets, exchanges and firms. We set the standards that they must meet and can take action against firms if they fail to meet the required standards"
"We are accountable to Treasury Ministers and, through them, Parliament. We are operationally independent of government and are funded entirely by the firms we regulate”.
I watched another brilliant interview by Jon Snow on Channel4 News yesterday (if you didn’t see it, then I suggest you click here). He was talking to Andrew Tyrie MP, Treasury Select Committee Chairman, about the letter Lord Turner (Chairman of the FSA) had written to Barclays Bank in February 2012 indicating the FSA’s concern regarding its “pattern of behaviour over the past few years”… and that it wanted “something done about it”.
Ooooh! That’s real fighting talk, that is. They’ve been concerned for a long time (but haven’t done anything about it)… so let this be a warning to them… because, if they don’t improve, we might even start stamping our feet or tutting or something... Right, that’s told them… oooh, they must be REALLY scared now!
In his interview, Jon Snow pointed out that it seemed that the relationship between Barclays and the FSA had broken down since 2009 – and that although he felt the regulator might be “fighting, but the regulator was losing”.
Andrew Tyrie’s response: “The regulator was getting tougher... making clear that they were getting more and more upset…I don’t know if they were being tough enough…”.
Pause for intake of breath…(!).
Snow concluded the interview asking: “We customers, we civilians, we voters are looking in on a tiny sliver of the City’s activities… if this is how bad it can get in one bank, what about the whole of the rest of the City?”
How bad indeed!
What IS the point of having a regulator (entirely funded by the firms it regulates!) if it appears to be totally ineffective?
I’m at a complete loss.
Photo: Andrew Tyrie MP, Treasury Select Committee Chairman.