FSA to adopt hard-line regulation

by Gill Montia

Story link: FSA to adopt hard-line regulation

The chairman of the Financial Services Authority (FSA), Lord Adair Turner, has warned the UK’s banks that supervision will, in future, be hard-line.

It will also be more expensive and Lord Turner expects the financial sector, rather than the taxpayer, to bear the burden of this.

Speaking to The Guardian, Lord Turner said the new regime will involve more people asking more questions and that the FSA needs to ensure that its approach is intelligent and focused on where the risks really are.

The outlook for City bankers is for a regime in which opportunities for high risk, high reward activities will be severely limited.

Defending the FSA’s tattered reputation over the credit crisis, the chairman of the regulator asserted that if the FSA had asked banks to raise their capital bases 18 months ago, the request would have been met by accusations of over-regulation.

According to Lord Turner, the Authority had concerns about the business models of Northern Rock and Bradford & Bingley before their collapse but would have been seen as harming the competitiveness of the City of London, had it tried to act.

Lord Turner also expects to pay higher salaries to attract the right quality people.

Given the scale of job losses in the City, the choice will be wide and Lord Turner has already made reference to the benefits of hiring poachers turned gamekeepers.