Call to ease financial policing

Financial regulation is overburdensome and counter-productive in areas ranging from retail financial services to derivatives. Regulation should be replaced with greater disclosure, according to a series of essays published today by the Institute of Economic Affairs, a free-market think- tank.

Jim Stretton, UK chief executive of Standard Life, says Britain's new arrangements for supervising retail financial services through the personal investment authority are "wrong, muddled and dangerous", lead to unachievable expectations, and prevent healthy developments in the market.

Standard Life was one of the last big institutions to join the PIA, because of these reservations. Mr Stretton says that regulation of the life assurance industry needs fundamental review. "We simply cannot continue the vicious circle of impossible expectations which lead to breaches of those expectations, and which then induce regulators to increase the extent of their activities and create even more impossible expectations."

The theme that regulation is harmful is taken up by Harold Rose, visiting professor of finance at the London Business School. Prof Rose argues that regulation often simply helps keep new competitors out of the market. He recommends replacing controls on financial institutions with greater disclosure, and relaxing libel laws to allow franker press comment.

Some support for the theory that regulation simply protects vested interests is provided by Donald Brash, governor of New Zealand's central bank. Mr Brash describes the changes New Zealand is in the process of making to its banking supervision arrangements. Concerned that the existing arrangements were too costly and reduced the effectiveness of market disciplines, New Zealand is introducing instead quarterly disclosure requirements. The only objections to the changes, according to Mr Brash, have come from the banks themselves.

Additional disclosure is seen as the key to protection from derivatives disasters by Maureen O'Hara, professor of finance at Cornell University. "What is needed to protect the financial system is not so much greater regulation as greater disclosure of trading information."

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Jeremy Clarkson, left, and Richard Hammond upset the locals in South America
tvSpoiler alert: It has been talked about for months
Arts and Entertainment
Game of Thrones actor Kit Harington
tv
Voices
Almost one in 10 of British soliders fall victim to serious psychiatric side-effects after being prescribed Lariam.
CHRISTMAS APPEALThis is how one charity is using that 'waste' to feed Britain's war heroes
Life and Style
Facebook has apologised after a new feature inviting users to review a collection of their 2014 highlights caused some to be confronted with pictures of their recently deceased family members and friends
tech
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

Homeless Veterans appeal

Former soldiers pay their respects to a friend who also served
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

The Locked Room Mysteries

As a new collection of the genre’s best is published, its editor explains the rules of engagement
Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

How I made myself Keane

Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Parting view of Ofcom chief... we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
A look back at fashion in 2014: Wear in review

Wear in review

A look back at fashion in 2014
Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

Ian Herbert: My 10 hopes for sport in 2015

Might just one of them happen?
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?