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New regulator won't repeat FSA's failings, says Wheatley

The man taking charge of the regulatory body that is replacing the Financial Services Authority has pledged a clampdown on bad financial products under his watch. 

 
New regulator won't repeat FSA's failings, says Wheatley

Martin Wheatley, incoming chief executive of the new Financial Conduct Authority (FCA), which will be launched next year, said the approach would mark a departure from the FSA, which he said had placed 'too much trust' in firms to disclose information to customers at the point of sale.

'We didn't look enough at how products were designed, how decisions were made or how staff were incentivised,' he said.

'With product intervention, let me be clear that this power will "do what it says on the tin" – it will allow the FCA to intervene where we feel products have been inappropriately sold or are simply bad products.'

He said the new regulator's approach would involve intervention to stop problems at an earlier stage than under the current regime.

'We will be more prepared to use formal tools including enforcement actions to support the FCA's emphasis on intervening earlier to stop problems from occurring,' he said. 'We will take action to tackle root causes – like poor remuneration arrangements – rather than waiting for the risks to crystallise.'

Under a new regulatory framework brought in by the coalition government, the FCA will report to a new Financial Policy Committee at the Bank of England. The new set-up is known as 'twin peaks' as the roles of consumer protection and financial stability are being split into different organisations, with the former becoming the responsibility of the FCA and the latter passed to a new body called the Prudential Regulatory Authority, which will be a subsidiary of the Bank of England.

The shake-up follows intense criticism of the FSA and its failure to avoid the financial crisis and many other scandals of the past decade. 

6 comments so far. Why not have your say?

snoekie

Jul 03, 2012 at 12:42

It will not be difficult to do better than the frigging Stupid **s*h*les.

New criteria should be to protect the customer and not ignore the law and side with those that pay the licence fees.

The FSA nearly always took the side of Barclays. Talked about a rigged institution, that describes the FSA.

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lionel davis

Jul 03, 2012 at 14:32

And its reporting to the BOE, over the top boys we will follow you.

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SJB

Jul 03, 2012 at 16:35

I read that Hector Sants (the former so-called Head of the FSA) is set to become a deputy Governor at the BoE when the new regulatory body is setup next year.

If that happens, it's on a par with Fred Goodwin and Bob Diamond.

Sants should be excluded from any position that does not require cleaning of the toilets as his job description.

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Martyn

Jul 03, 2012 at 16:53

We ought to copy & keep Wheatley's "Job Description". If it's too good to be true, it probably is! How long to the first cock-up?

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Bill lawson

Jul 03, 2012 at 20:03

I can see that Martin Wheatley has teeth , hopefully the FCA will have a better bite tha the FSA that appeared to just watch it and let it all go unchecked .

The FSA should be investigated along with the banks and heads should roll without any reward,

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White Stick follower

Jul 03, 2012 at 21:12

Read what Hong Kong thought pf Wheatley's skills.

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