James Moore: FSA must not resort to macho regulation


Outlook One of the issues with the Alternative Investment Fund Managers directive is that it tramples over territory which should be owned by national financial regulators. EU member states have primary responsibility for policing their own financial sectors, within reason, and while the FSA has been anything but a paragon of virtue in recent years, it's hardly alone in that, and it's by no means clear that Europe would do a better job.

Yesterday the deliciously named Jon Pain provided the latest missive on how the FSA has been shaking up how it does its job and transforming the disastrous "light touch" regulation (read, not doing very much other than ticking a few boxes) that was the norm in the run-up to to the financial crisis into the new "intrusive" (read mean, and nasty) regime of today.

Mr Pain gave a number of examples of how this has been working in practice, the most interesting of which was the way the watchdog has, for a number of mergers or acquisitions over the last 18 months, "been at the heart of the analysis and judgements being made by senior management". Now doesn't that cast an interesting light on Prudential's decision to brief the media and investment community that it planned to price its rights issue a couple of weeks ago even though (as subsequently became crystal clear) it had failed to secure the watchdog's approval.

If the insurer indulges in this sort of behaviour too regularly it may well find itself falling foul of another of the FSA's innovations: that of "encouraging" (read demanding) a change in management or board members at regulated companies.

But the FSA should also have a care, now its future has been secured by dint of the Conservatives' failure to secure an overall majority in Parliament. Much water has passed under the bridge since Legal & General's partial victory in its appeal against a fine for endowment mis-selling. But the case did cast a very unsavoury light on the regulator's operations and internal processes.

The FSA needs to be careful not to resort to the sort of macho regulation that was on display during that very public appeal hearing.

One way of achieving this, of course, is hiring better people to work for Mr Pain. It might be unpalatable to suggest this in these times of pay restraint, but that means offering better salaries to those people.

News
people
Sport
Yaya Sanogo celebrates scoring the opening goal with Arsenal's English midfielder Alex Oxlade-Chamberlain
champions leagueLive: All the latest from the Emirates and Bulgaria, where Liverpool face Ludogorets
News
Andy Murray with his girlfriend of nine years, Kim Sears who he has got engaged to
peopleWimbledon champion announces engagement to girlfriend Kim Sears
Arts and Entertainment
An unseen image of Kurt Cobain at home featured in the film 'Kurt Cobain: Montage of Heck'
filmThe singers widow and former bandmates have approved project
PROMOTED VIDEO
News
ebooksNow available in paperback
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

Langley James : IT Support; Helpdesk, VMware; Manchester, £18k

£16000 - £18000 per annum: Langley James : IT Support; Helpdesk, VMware; Manch...

h2 Recruit Ltd: Business Development Manager - HRO - £70k+ ote

£35000 - £450000 per annum + £3k car, £70k ote: h2 Recruit Ltd: Do you want to...

Citifocus Ltd: Newly Qualified Accountants - Risk Mgmt

£Attractive Package: Citifocus Ltd: Prestigious financial institution seeks to...

Citifocus Ltd: Operational Risk Analyst

£Negotiable: Citifocus Ltd: Experienced operational risk professional with ban...

Day In a Page

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches
Colouring books for adults: How the French are going crazy for Crayolas

Colouring books for adults

How the French are going crazy for Crayolas
Jack Thorne's play 'Hope': What would you do as a local politician faced with an impossible choice of cuts?

What would you do as a local politician faced with an impossible choice of cuts?

Playwright Jack Thorne's latest work 'Hope' poses the question to audiences
Ed Harcourt on Romeo Beckham and life as a court composer at Burberry

Call me Ed Mozart

Paloma Faith, Lana del Ray... Romeo Beckham. Ed Harcourt has proved that he can write for them all. But it took a personal crisis to turn him from indie star to writer-for-hire