View from City Road: Pass that sword to Joe Palmer

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The Independent Online
Ken Bignall fell on his sword yesterday at the Personal Investment Authority. He felt it wrong to stay as a director after Barclays Life had been pilloried by the Securities and Investments Board, the City's senior regulator.

Don't faint with surprise, but Mr Bignall actually thinks that if you run an organisation that gets a rap over the knuckles from the authorities it compromises your role as a regulator.

Somebody should now wipe the blood from Mr Bignall's sword and pass it down the PIA boardroom table to Joe Palmer, the chairman. Mr Palmer is the man who ran Legal & General while it was committing offences for which it was fined pounds 180,000 and sternly rebuked by Lautro, the life assurance regulator. Calls for Mr Palmer to be dislodged have been resisted by the PIA. But it will be hard to ignore Mr Bignall's example.

Another anomaly underlined by the Barclays case is that SIB's policing arm cannot fine those it oversees, unlike junior bodies such as the PIA and Lautro, which have the power to levy financial penalties.

Guess who has refused to join the PIA and opted instead for direct regulation by SIB? None other than Prudential, whose selling methods - we learnt this week - are being investigated by Lautro.

The Pru did not refuse to join the PIA to duck fines, but because it thinks only a statutory regulator will be workable. Even so, Andrew Large, the SIB chairman, must press the Treasury urgently for the right to fine, in the interests of equal treatment.

It hardly seems fair that just as the Pru exercises its right to ask for regulation by SIB, Barclays Life and just about everybody else who matters are switching to the PIA.