Hans de Gier, chairman and chief executive designate of Warburg Dillon Read - the investment bank formed by the merger of UBS and SBC - said the UK's current regulatory regime was "perceived as arbitrary" by the City.
Speaking to a collection of the great and the good in UK financial services, Mr de Gier said: "The disciplinary process will, I suggest, only be both fair and seen to be fair when it is clear to the industry that firms who disclose problems to the SFA and who take prompt remedial action are not automatically subject to lengthy, and eventually published, disciplinary action ... And although I have singled out the SFA here, I do not believe that other regulators are free of such perceptions".
The Warburg Dillon Read chief also cautioned the regulator against trying to force firms like his own to change management structures "to fit national regulators' blueprints". Mr de Gier said such a move "is likely to find the firms moving their operations to a jurisdiction where the structure which the firm has devised to best manage its operations can be maintained".
Mr de Gier's comments struck a chord among the conference delegates, who spoke of the need for a new "partnership approach" between the regulators and the regulated.
Alistair Darling, chief secretary to the Treasury and another conference speaker, declined to comment directly on press reports suggesting the new FSA could face a two -year wait for its full regulatory powers.
The Bank of England Act, which came into force yesterday, officially transfers responsibility for banking supervision from the Bank to the FSA. The FSA will also now supply regulatory services to the existing City watchdogs Imro, the PIA and the SFA.
However, the watchdogs will not be officially merged into the FSA until the proposed Financial Services Bill becomes law. According to some sources, the bill - which is yet to be published in draft form - may not come into force until the middle of 2000, rather than late 1999, as first intended. This delay has sparked concerns in some areas of the City of prolonged in-fighting between the various City regulators.
Mr Darling said: "The government never announces the programme for coming legislation. All I can say is the bill will be published in draft form in the summer." He added: "We are committed to consulting as widely as possible. We want a system that will endure, and time listening is time well spent."
Some of the delegates at the conference expressed concerns about integrating regulation of wholesale financial services - transactions between two financial institutions - and retail financial services - transactions between financial institutions and the general public. Delegates said the culture of regulating wholesale activities was very different from that of regulating retail financial services. One said: "The consultative documents produced so far by the FSA have been very consumerist in tone. The wholesale financial community would like the FSA to spell out very clearly the line that divides wholesale and retail regulation."
Howard Davies, chairman of the FSA, who made the opening address at the conference, called EU legislative procedures "cumbersome" and ill-suited to the needs of the financial community.
Mr Davies called for a greater degree of flexibility in EU laws covering financial markets.
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