James Moore: Have lessons been learnt? Regulators have failed again and again and again

Outlook Something up with Libor, you say? Sorry guv, not my problem, speak to the British Bankers' Association. This, in a nutshell, was the attitude of the Financial Services Authority when the issue was raised with it on 26 separate occasions, and perhaps as many as 74 where there were oblique or indirect references to the problem in FSA communications.

So said an internal audit, the results of which were released yesterday.

The report cleared the FSA of the sort of the systemic supervisory failings that contributed so much to the mess at Northern Rock. But it still painted a very unflattering picture of the way the regulator handled the affair. Once again the organisation appears to have been asleep at the wheel. It is true that there was a lot going on when it became clear that some banks were deliberately low-balling their submissions to the various Libor panels, namely the financial crisis. Which was the cause of the low-balling.

But that's a cop-out. If the police failed to follow up on leads relating to a potential terrorist incident because they were in the middle of a big murder inquiry and a bomb went off as a result they'd be eviscerated, and rightly so.

The question now is whether lessons are being learnt. If one looks back to past failures they clearly haven't been, because the failings have been repeated, again and again and again.

The FSA has produced a succession of these "speak bitterness" self-criticisms where it hangs its head and accepts a kicking from either an internal or external auditor over the way it has handled a foul-up, starting with Equitable Life more than a decade ago and running on through the aforementioned Northern Rock, culminating with Royal Bank of Scotland and now this. There's an HBOS report still to come too, remember, although it's not hard to guess what it will say. Start with the Royal Bank of Scotland report, change the names, lather, rinse, repeat.

On the fact of it, indulging in another reorganisation is a recipe for more of the same. Reorganisation is at the core of the FSA's dysfunction. It was created from the fusion of nine separate regulators, and it's only because Gordon Brown went on to commit far more egregious policy errors that this is, by his standards, seen as a misdemeanour rather than a high crime.

So there are good reasons for being concerned about the Government's plan to split the FSA into two, with conduct issues (such as Libor) going with the Financial Conduct Authority (FCA) and prudential supervision landing with the Bank of England's Prudential Regulation Authority (PRA). It doesn't appear to be the most sensible plan.

But maybe it is exactly the medicine that is needed here. New organisations, new leadership, new culture.

Certainly there are grounds for optimism that the FCA will get this, and oh how it needs it. In Martin Wheatley it has a businesslike CEO who clearly "gets it" and achieved good results in Hong Kong. The PRA? That's more of an open question. The Bank has never been overly fond of accountability. And it's had to produce speak bitterness self-criticisms of its own, specifically in relation to BCCI and Barings, failures every bit as disastrous as those of a more recent vintage.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
News
news
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
PROMOTED VIDEO
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
Life and Style
fashion
Arts and Entertainment
Japanese artist Megumi Igarashi showing a small mascot shaped like a vagina
art
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
i100
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
Arts and Entertainment
tvChristmas special reviewed
Arts and Entertainment
Jenna Coleman as Clara Oswald in the Doctor Who Christmas special
tvForget the rumours that Clara Oswald would be quitting the Tardis
Arts and Entertainment
tv
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: Oil Operations

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

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all