Wednesday's approval of the Stock Exchange's order driven trading system due to start in October has been described as more important than Big Bang. Even so the success of automated trading is arguably less important to the credibility of London as a financial centre than the ability of the City to ensure its financial institutions are competently and prudently managed.
The perceived high cost of London's outdated system of market makers may deter investors but it is nothing like as damaging as the regular drip of financial disasters over the past two years. If the City is a world leader, Barings, Jardine Fleming, Deutsche Morgan Grenfell and most recently NatWest Markets have made it look a pretty shambolic one at times.
The SIB's consultative document on the role and responsibilities of senior executives is therefore an important document which Sir Andrew should be commended on for fudging only slightly.
One of its two main proposals - that companies should draw up a statement of management structure and systems - is a valiant attempt to plug the gaps through which responsibility has so often been allowed to fall. A properly constructed statement should in theory put an end to the buck passing that ensures it's always someone else's fault.
Its other main leg, draft guidance on the conduct of firms, their accountability and the responsibility of the individuals it employs is also admirably well-intentioned. But its deliberately general tone, which ensures it covers most eventualities, runs the risk of being so vague as, in the end, to mean nothing very much at all.
The most worrying shortcoming of SIB's proposals is their refusal to face up to the central issue. When another Barings collapse happens, will the authorities have the regulatory structures in place, and the will, to bring those at the very top of the failed firm to book?Reuse content