The Financial Conduct Authority will be more intrusive and judgemental than the current Financial Services Authority.
Speaking to the Building Societies Association in Manchester yesterday Martin Wheatley, chief executive officer designate of the FCA, said he will be more interventionist, judgemental and forward looking.
He says: “In the past I would characterise our approach as firm specific, backward looking in that we would look at what a business has done and empirical-based as we would build a body of evidence by which to judge a business.
“The key difference is that while we will still do that to a degree we look at business models too.”
Wheatley says the FC will be interested not just in what you have done but what your plan is going forward.
He adds: “Where are your revenues coming from? Where is your growth? What controls are in place?
“We will also be looking at sectors as a whole as well as individual firms.”
He says the best question compliance teams can ask is where is our profitability coming from in the next three years.
The FSA has now been split into prudential and conduct divisions internally and is operating as a shadow regulator, although the legal entity if the FSA will exist for another year.