Financial crisis: were the regulators negligent?

The most recent response to the global financial crisis by the UK’s financial services regulator, the Financial Services Authority (FSA), has been the publication of the Turner Review. Conducted by Lord Turner, the chairman of the FSA, the Review examines the underlying causes of the crisis and recommends a number of reforms. In a recent speech at the Chatham House conference on Global Financial Regulation (a week after the publication of the Turner Review), Verena Ross, a member of the Executive Committee of the FSA and the Authority’s Director of Strategy and Risk, addressed the question of whether regulators were negligent in not preventing the crisis. This is an edited extract from Ms Ross’s speech in which she also outlined the shift in the FSA’s supervisory philosophy as embodied by its new Supervisory Enhancement Programme and what the Authority was doing internationally to enhance supervisory co-operation as well as its ability to spot and mitigate any future crisis