The Financial Services Authority has admitted that it inadequately monitored Northern Rock in the period before the bank’s crisis last summer and that its supervision of the lender was not carried out to an acceptable standard.
Clive Briault, former managing director of retail markets at the FSA, appears to have fallen on his sword over the matter and the regulator is implement-ing new standards for the supervision of what it calls high impact firms.
These measures involve increasing staff levels, training and introducing su-pervisor specialists.
I am a humble mortgage broker – a mere cog in the wheel of world finance. But from this lowly perspective, it seems to me that the FSA’s answer to pretty much every issue is to throw more people at it.
The regulator seems like a leviathan – cumbersome and slothful in the speed with which it reacts to situations and mired in inexplicable rules and regulations. I defy anyone to look at any of its website pages and come up with a plain English interpretation.
But I’m sure that any organisation with a remit like the FSA’s is bound to be bogged down. The same thing happens with newly elected politicians. They start off with an almost religious zeal for reform, promising never to be tainted by the body they are becoming part of, yet within a year they are jaded, cynical shadows of their former selves.
The FSA is an admirable body with admirable aims. I’ve always championed a regulated financial services industry and would far rather have regulation, warts and all, than re-vert to an unregulated model.
But surely employing more supervisors will not make enforcing the regulations any easier. Liberal Democrat sha- dow chancellor Vince Cable is right. The regulations need to be simplified, not just for those working in the industry but also for the public. All the public hears at the moment is a load of jargon-filled doom.
My new colleague Matthew says much of the fun has gone out of our industry. He’s right. Complex rules have weighed down brokers and the tightening of criteria has made life harder. I’m not afraid of hard work – it’s just that the conditions in which we have to operate these days are frustrating.
Reading back over this piece, I realise I sound rather de-pressed but far from it, I’m enthusiastic about my new role and the future. Clients need reliable advice regardless of market conditions, but wasn’t it nicer to work in a positive environment?