After joining Britain’s financial watchdog from the helm of the Prudential Regulation Authority at the start of this month, new chief Andrew Bailey announced plans for a mission overhaul at the regulator’s annual public meeting yesterday. Key to the review will be fleshing out the broad-based principles that underpin the regulator’s statute objectives in order to steer away from debates about ‘light touch’ versus ‘heavy touch’ regulation, he said: ‘The mission is about getting a philosophical base for how we choose what we do.’

Differential treatment

Among the potential points of review flagged by Mr Bailey was the possibility of embracing different reactions and responses for different kinds of consumers. Underlying the FCA’s work should be the ‘general principle’ that consumers should take responsibility for their own decisions, he said. However, figuring out how that principle is applied in practice is complicated by the ‘necessarily very high level’ objectives set out in the FCA statute: ‘Among these [questions to be answered], I would highlight whether we should prioritise some consumers over others, how we could do this and the need to explain and justify how the FCA decides among its tools when it sees the need for action,’ he argued, adding that ensuring a sturdy correlation between levels of consumer care and product risk will also be crucial. Mr Bailey has indicated that the watchdog will publish a proposal on its mission in autumn, to be followed by a period of ‘intensive public consultation.’

Sources: Financial Times; Financial Times (2)