UK financial watchdog vows to get tough

The head of the UK’s chief financial watchdog has warned the City that the days of soft-touch regulation are over.

In an interview with the Guardian newspaper, Adair Turner, chairman of the Financial Services Authority (FSA), said the body had probably been “over-deferential” to the rhetoric of “over-regulation and red tape”.

As such it would now be asking more questions over the financial health of British banks and other institutions in a bid to prevent further collapses in the sector.

Turner took over as chairman of the FSA in September. It followed a turbulent year in which the regulator faced criticism over its role in allowing Northern Rock to collapse.

The plight of Bradford & Bingley, RBS and other banks has also put focus on how the UK should regulate the financial services sector.

In the years before the Northern Rock crisis, the FSA faced pressure – from both the business world and parts of Westminster – to move towards a “hands off” approach to regulation.

However, in the wake of the fall-out from the credit crisis, the new man at the top has implied that the regulator would be toughening its stance.

He told the Guardian that the days of trying to regulate Britain’s big banks “on the cheap” were over.

Turner said: “There is no doubt the touch will be heavier. We have to make sure it is intelligent and focused on where the risks really are.”

“We shouldn’t regulate for its own sake, but over-regulation and red tape has been used as a polemical bludgeon. We have probably been over-deferential to that rhetoric.”

In a bid to stiffen up regulation, the FSA would be recruiting extra staff, he said during the interview.

Turning to the current crisis, Turner said the British Treasury’s bail-out plan would take time to take effect.

He suggested however that the British economy would escape the worst excesses of deep economic gloom.

“There is no chance of a 1929-33 depression. We know the lessons and we know how to stop it happening again,” he said.

More in this Section

UK quarantine plan ‘one shambles after another’, says Ryanair bossUK quarantine plan ‘one shambles after another’, says Ryanair boss

Ibec: Tax revenues may pave way for extension of wage-support schemeIbec: Tax revenues may pave way for extension of wage-support scheme

Mortgage approvals fall more than 40% in AprilMortgage approvals fall more than 40% in April

Providence Resources pays off ex-CEO Tony O'Reilly Jr with €450k exit dealProvidence Resources pays off ex-CEO Tony O'Reilly Jr with €450k exit deal


Lifestyle

Kim Sheehan is an opera singer from Crosshaven, Co Cork, and is this year’s recipient of the Jane Anne Rothwell Award from Cork Midsummer Festival.A Question of Taste: Cork opera singer, Kim Sheehan

Developed in Ireland by Dublin-based indie gaming house Dreamfeel, If Found follows university graduate Kasio as she returns to Achill, Co Mayo, from the big city.'If Found': a story of belonging from the Irish videogame scene

B-Side the Leeside: Cork's Greatest Records - Giordaí Ua Laoghaire tells Don O’Mahony about the offbeat outfit who created some of the most innovative music on the Irish scene in the 1990sB-Side the Leeside: Nine Wassies from Bainne - A quirky slice of creativity

More time indoors is a chance to consider how we buy for our homes without being slaves to fleeting trends, writes Carol O’CallaghanMore time at home offers a chance to consider how we buy for our interiors

More From The Irish Examiner