The FSA’s message is not being heard
Are there limits to what regulators can achieve? The FSA certainly thinks so, repeatedly saying that it cannot promise a zero-failure regime. But it’s not clear that politicians or the public have understood what that means.
Similarly, amid the outcries over bankers’ bonuses, there is rarely any acknowledgement of the rules already introduced by the FSA. The FSA has commented that the view among politicians and the public that customers should always receive 100% redress after an FSA rule breach “gives rise to real questions as to how far the regulator’s powers should extend”.
There remains a real gulf between what many politicians and the public expect, and what the FSA delivers now and what it says it can deliver in the future. The FSA’s message isn’t getting through - and that’s bad news for the regulated sector.
Mathew Rutter is a financial services regulatory partner at DAC Beachcroft