Enterprise Britain has consistently questioned the cost and effectiveness of the remodelled financial regime. There will always be tensions between market operators and those responsible for best practice. But what do the regulators themselves actually think about their role in our community?
An insight into this conundrum has been given by Tracey McDermott, Director of Enforcement and Financial Crime, at the Financial Conduct Authority (“FCA”). Speaking at last month’s NERA Economic Consulting seminar she said that
“firms must grasp the nettle and embed cultural values that champion positive behaviour and make clear that there is no room for misconduct…unless we see an extended period of firms walking the walk as well as talking the talk, trust will not be regained, and we will all, industry, regulators and most importantly, consumers – be worse off as a result.”
The 2013 Enterprise Britain Christmas competition starts here:
What is she talking about?
“Embed cultural values”: financial regulation is about a rule book. If the FCA will write it clearly and properly, we’ll follow it.
“Positive behaviour”: You’ll do as we say.
“No room for misconduct”: there’s plenty of scope for wrong doing: it’s the nature of the beast. The FCA needs to do its job properly.
“Walk the walk”: I repeat, do as I tell you.
“Trust will not be regained”: from where? There never has been trust.
A fascinating insight into modern financial regulation can be found in ‘Making It Happen: Fred Goodwin, RBS and the men who blew up the British Economy’ by Iain Martin (Simon & Schuster: 2013). This well written and thoroughly researched book is compelling if only as an insight into the mind of Fred Goodwin. Of special interest are chapters 10 -13 which follow banking regulation and Gordon Brown’s one man crusade for lighter touch practice.