Speaking at last week’s FSA annual public meeting, Sants said that, despite the fragile state of the market, he was confident of creating the right regulatory approach, with policy reforms, such as the Retail Distribution Review (RDR) and its intensive approach to supervision forming, a key part of the new framework.
Two separate organisations will replace the FSA by 2013, overseeing conduct and prudential risk, with Sants leading the restructure after agreeing not to leave the FSA this summer as planned.
Sants said that the greatest challenges facing the restructure were the beginning of substantial changes to European regulation and a hostile market, as senior management become unwilling to be ‘second guessed’.
He said it was critically important that the UK fully engages with the changes in the European regulatory environment, because national regulators would ‘increasingly become an arm of European policy’, while also standing its ground in the face of calls for light regulation.
Jonathan Cornell, communications director of First Action Finance, said: “It’s a very important message for the FSA to deliver that it is very much business as usual. We are not losing a regulator, but having one with a different name, and anyone who thinks otherwise is deluded.
“The FSA is very good at engaging with brokers, but it has to be tough and make decisions on key issues on its own. Yet it’s crucially important it does consult with the industry.”
