FSA regulatory concepts: from risks to principles

John Tiner’s resignation announcement in January alongside the ever-forward advance of principles-based regulation prompted one of our regular contributors to look at the development of regulatory approaches since the FSA was conceived a decade ago in 1997. Adam Samuel looks at the route from a risk-based regulator to one obsessed with treating customers fairly and principles.

Adam Samuel Dip PFS, LLM, barrister and compliance consultant can be contacted on tel 020 7435 2620; email AdamSamuel@aol.com, web-site www.adamsamuel.co.uk His book,“Complaints and Compensation: a Guide to the Financial Services Market”, is available from www.cityandfinancial.com and www.adamsamuel.com.

It is almost ten years since Gordon Brown celebrated New Labour’s election victory in 1997 by giving independence to the Bank of England over interest rates. As a trade-off and in response to the awful mess created by the Bank over BCCI, the Government removed from the Old Lady of Threadneedle Street its power to regulate the banks. Following policy laid out in opposition by Labour, it then merged this function with the Securities and Investment Board (SIB), the government agency responsible for financial services regulation. SIB in turn would, under its new guise, the Financial Services Authority, take over the functions of the old self-regulating organizations.