The opportunity to simplify and possibly strengthen the regulatory regime has to be grabbed before it goes away. If the authorities delay much longer, the banks, building societies, fund managers and stockbrokers reluctant to join the PIA will feel free to continue as they are.
The arguments in favour of a single regulatory body covering all investments sold to individuals are overwhelming. It would help to turn the current jungle that is financial regulation into something approaching an orderly system. It might even result in tougher regulation, although that is not guaranteed by yesterday's consultative document, which was noticeably lacking in facts and figures.
Without the PIA, the future of independent financial advisers will again be in doubt, given the difficulty of financing a compensation scheme for them. And the future of self-regulation itself - already under pressure because of the Maxwell fallout - will come into question.
The Chancellor may, of course, have other things on his mind. But Anthony Nelson, the Economic Secretary, who is responsible for City regulation, should take time out to suuport the new body. He should persuade the life companies to relax their requirements and see if there is a way to comfort the banks and others so they join the PIA.
If he is successful, he should then turn his attention to sorting out wholesale regulation. But that is another story.Reuse content