More principles, more challenges

The regulator has faced some tough questions over the past few weeks following the run on Northern Rock, and the FSA itself has said that there are lessons to be learnt. But will the recent events upset its plans for more principles-based regulation? In this extract from a speech by David Kenmir, managing director of regulatory services at the FSA, he explains why the new regulatory approach is exactly what is needed and also presents new ideas on increased disclosures about firms.

Nobody at the FSA thinks that a 9000-page rule book is sustainable, equally nobody thinks that the 11 FSA Principles alone would suffice. We are moving along the spectrum between these two extremes. Rules will still have an important part to play, for instance where market failure analysis or EU Directives lead us to conclude that they are the right regulatory tool to deploy.