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Regulation of HBOS was wrong admits FSA

Lord Adair Turner, chairman of the Financial Services Authority, says that in retrospect the supervision of banks like HBOS was wrong.

The admission came was Lord Turner and the FSA’s chief executive Hector Sants were grilled by the Treasury Select Committee.

MP Michael Fallon questioned the justification for a regulator that seems to be failing to do its job.

He says: “What is the point of a regulator that costs us £400m this year, that employees 2,500 people, that is given 10 big British banks to supervise and allows five of them to collapse?

“What we want to know is, is the FSA actually fit for purpose?”

Lord Turner failed to confirm that the regulator is well-placed to carry out its role, instead admitting: “It is going to be fit for purpose given the changes we going to make and we are making.”

He concedes that in supervising banks such as HBOS mistakes were made despite following the regulatory rulebook.

But Lord Turner adds: “We were supervising banks like HBOS within a particular regulatory philosophy which I think in retrospect was wrong.

“[The regulation of HBOS] was a competent execution of a style and philosophy of regulation which was in retrospect mistaken.”


Lloyds TSB and BoS lose their AAA rating

Moody’s Investors Services has downgraded the credit ratings for Lloyds TSB and Bank of Scotland from AAA to AA3 as a result of HBOS’ high exposure to risk.

Target loan servicing wins servicing contract

Target Loan Servicing has won a significant contract to service loans for Park Motor Finance, a wholly-owned subsidiary of Credit Suisse. The loan portfolio contains approximately £80m of motor loans for 20,000 customers.  This new service contract will secure up to 50 jobs in Newport, South Wales.James Snow, chief executive officer for Target Loan Servicing, says: […]


Don’t punish the front-line troops for fat cat follies

Many of us in the financial services industry watched with considerable interest the former bank bosses and our illustrious Prime Minister being quizzed by the Treasury Select Committee this month.

Goldsmith Williams offers HIP incentive

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England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.


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