Regulatory challenge
25th Aug 2010
"UK government has ambitious proposals for a regulation revolution across business sectors. No other area is as deeply affected as financial services regulation.
The plan to scrap the FSA and bring its powers into a new Consumer Protection and Markets Authority and Prudential Regulation Authority under the Bank of England is major challenge for financial services firms. Even more so for personal finance providers if the OFT's consumer credit functions also move across to the new authority next year.
How can these businesses make their voice heard? Shaping regulation will be a significant challenge this autumn: 1) public servants in the FSA and Bank of England are still figuring out where their jobs will lie within the new arrangements and 2) ministers are preparing for party conference season and the spending review 3) many backbench MPs interested in financial regulation are new in post and still working out parliamentary processes, much less how to influence regulatory reforms.
This means financial services business should, as part of their public affairs efforts during September, focus on meeting senior Treasury and BiS officials developing regulation. Ministers mustn't be neglected, but these officials are the steadier hand of government in an age of political overhaul. They have the power to make or amend regulation that can revive or kill the financial services sector."