Daily Political Alert - Thursday 17 February 2011

Financial Regulation

The Treasury today published  the consultation paper 'A new approach to financial regulation building a stronger system'. It can be found at http://www.hm-treasury.gov.uk/consult_finreg_strong.htm

At the same time, the Government announced the appointment of external members to the Interim Financial Policy Committee - see http://www.hm-treasury.gov.uk/press_23_11.htm 


Peter Vipond, Director of Financial Regulation and Tax at the ABI, said in response: 

We welcome the name change and are encouraged that the Government seems to be making clear that the new Financial Conduct Authority will be proportionate, impartial and will seek to promote competition and consumer choice.  Consumers interests will be served by having a regulator that recognises the value of consumers having a wide choice of products in a competitive market.  

We are also pleased that the Government is acknowledging the concerns of insurers about the accountability of the Financial Ombudsman Service, in particular ensuring its role is as an adjudicator not a regulator. But we are concerned that so far none of the bodies will have a statutory objective to maintain London’s competitiveness as a global financial sector – this is too valuable a prize to be thrown away.  

This overhaul of the UK regulatory system is a very significant change. The most important thing is to get these changes right. It will therefore be vital for the Government to remain open minded throughout the pre-legislative process ahead to make sure these changes strengthen the UK’s world leading financial services sector and the customers it serves.