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Sants 'extremely sorry' for FSA’s dismissal of TSC’s RDR report
Markets
by Alex Steger , Sarah Miloudi on Nov 01, 2011 at 13:12
Hector Sants told parliament he is 'very sorry' for the Financial Services Authority’s (FSA) response to the Treasury Select Committee’s (TSC) report on the retail distribution review (RDR) this summer.
Under questioning by the TSC, it was put to Sants that the FSA’s response showed contempt for parliament and the TSC by quickly issuing a press release sayings that despite the issues raised by the TSC in July, the RDR's implementation date would remain fixed at 31 December 2012.
‘I am extremely sorry that that impression was given,’ said Sants. ‘I have been a proponent of accountability to parliament, it wasn’t our intention to give that impression and I’m very sorry that impression was given.’
FSA chief Sants said the reason for the FSA's swift response was due to pressure from the media, telling MPs that it was concerned that if a hasty response was not given, the media would say the RDR was to be delayed or reversed.
Garnier responded: ‘I’m grateful for your apology..how are you going to repair this damage?'
Sants said he was keen for the new regulator, the Financial Conduct Authority (FCA), to be seen as more accountable. He said its current mandate was the same as the FSA which meant it was accountable to Parliament for delivering a set of objectives but not for how those objectives were achieved.
‘We have an independent regulator working on a set of objectives for which its is accountable but its rules are its own responsibility,' he said.
Lord Adair Turner, chairman of the FSA, said he would like to see the FCA continue with this model but conceded in future it should make minutes of important meetings, such as those on the RDR or the Mortgage Market Review, to be made public.
‘I believe the model should continue to be an independent regulator ..that is the model with Ofgem and Ofcom,’ he said.
He said that in the same way the Monetary Policy Committee made minutes of its meetings public, the FSA board could too.
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4 comments so far. Why not have your say?
CoeurDeLion87
Nov 01, 2011 at 14:36
What a shambles! It not only shows utter contempt for Parliament but also to the electorate and the millions of people who expected the coalition to curb regulation in UK. The RDR is the most unwelcome draconian load of balderdash that I have ever had the misfortune to read. As for forcing tens of thousands of regulated personnel out of the industry that's another matter but I still don't agree with it. The timebomb is ticking and I for one don't give a jot who I upset over the RDR. It's plainly wrong, ill conceived, undemocratic, unfair, fascist and stupid. The FSA is splitting into 3 hydras and as Sants stated "....he was keen for the new regulator, the Financial Conduct Authority (FCA), to be seen as more accountable. He said its current mandate was the same as the FSA which meant it was accountable to Parliament for delivering a set of objectives but not for how those objectives were achieved. We have an independent regulator working on a set of objectives for which its is accountable but its rules are its own responsibility." These people at FSA are turning the industry upside down for some sort of doctrine that only themselves understand. It has nothing whatsoever to do with capitalism, raising of capital for UK industry, protecting investors and has absolutely everything to do with confusing the public and placing huge swathes of good quality investment business into the hands of the banks and wealth managers who have done enough damage to the capitalist spirit already. Wake up UK!
report thisGeoff Pollock
Nov 01, 2011 at 15:29
"The timebomb is ticking and I for one don't give a jot who I upset over the RDR." You have not upset me as I don't know who you are! You could be Cameron, Osbourne or Sants for all I know!
report thisKnowledgable insider
Nov 01, 2011 at 15:58
Sants is extermely sorry....ha ha ha ...sorry that he was rumbled and that his arrogance was shown for all to see. Absolute power without responsibility for failure is what the FSA currently posseses thanks to a blind government. When it all goes wrong Sants and Hoben will be off to pastures new no doubt i'm sure there are many more fools out there prepared to pay them richly for copletely screwing up a system that works reasonably well.
report thisAnonymous 1 needed this 'off the record'
Nov 01, 2011 at 16:02
What about accountabilty to the public who have not had their views of RDR accounted for, or is the subject just too complex for them to understand?Perhaps a decision tree may help !!!!
Don't we already have a viable system already accepted as an alternative to fees and proved to be overwhelmingly more palatable to many customers, as demonstrated by the countless who selected a commission option rather than a fee option.
Perhaps "what customers want" does not fit well in the regulators vision of the future.
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