FCA should debate supervision/cost trade-off, says Lord Turner
FSA chairman Lord Turner has warned that the incoming Financial Conduct Authority (FCA) cannot inspect or directly supervise most of the 25,000 firms under its remit without extra funding.
The FCA should debate the trade-off between more intense supervision and higher regulatory cost, Turner said.
“Inevitably many will continue to be monitored via scrutiny of submitted returns, supplemented by sectoral and thematic investigations of specific issues,” Turner said at a speech at Mansion House.
He also said the FCA should discuss whether or not 100% redress should be made to customers.
“The natural assumption may be that wherever there has been a breach of regulatory rules and also customer detriment, that 100% redress should be available,” Turner said. “But general principles of law mean that if the breach of rules did not without question cause the whole loss, then 100% redress is not available.”
Parliament could decide to change that balance, Turner said.