Wednesday, Feb 25, 2009
FSA - "there was political pressure to be less intrusive when looking into banking organisations"
FT: FSA admits regulation of banks was flawed
The Financial Services Authority's (FSA) "philosophy" of regulation which saw several banks fail was flawed, the chairman of the regulator admitted today (25 February).
Giving evidence at the Treasury Select Committee this afternoon, Adair Turner, the chairman of the FSA said while there was competent execution, "in retrospect" the style of regulation was not.Lord Turner said that prior to the banking crisis, there had been political pressure to be less intrusive when looking into banking organisations. As a result, he said a style of regulation had developed where it was the FSA's role to look at institutions structures and systems as opposed to probing its business strategy.
Posted by jack c @ 04:38 PM (328 views) Add Comment
4 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. 51ck-6-51x said...
The finger of blame turns. Towards the politicians - but as it does, no doubt some new and more urgent problem will arise.
2. bob1 said...
I have always wondered why the Madoffs of this world weren't arrested years ago when everyone in the business knows what to look for. Perhaps political pressure really is the answer?
For example, one way of spotting an honest fund is by looking for funds that are periodically closed to new investors. There is always more money than decent assets, so it become progressively harder for a fund to invest in 'value'. This is why an honest fund periodically closes. Everyone in the business knows this, so when you see a fund that concentrates its efforts on constantly recruiting new investors, you automatically know its' either dodgy or reckless. For years I have been puzzled by the regulatory lot. I always used to veer between thinking that they must be thick and thinking that they must be deliberately ignoring all these obvious frauds. Perhaps I finally have my answer?
3. alan said...
Thanks for the quick post Jack.
I can't believe Sants & Turner stood up and said it! Peston's blog says it was "jaw dropping".
Not to worry, the FSA say they have "learned lessons". Well, that's a bit late isn't it?
4. Eternal Sceptic said...
"a style of regulation had developed where it was the FSA's role to look at institutions structures and systems as opposed to probing its business strategy." Or in other words the paintwork looked good, pity the structure was riddled with woodworm!
What a pathetic excuse, and let us have more elaboration on who applied the political pressure.
Now let me guess_ Crash gordo, the economy in safe hands lunatic, who keeps saying either America caused the problem, or it is a global problem.
The entire political system and civil service would appear totally useless.
A new paradigm is about to appear unless they arrest the present slide into chaos, and I suspect that when it arrives they will like it even less than the rest of us. The bunkers will only hold so many for so long.