John Griffith-Jones, who has been embedded in the Financial Services Authority (FSA) for just six weeks at three days a week, was grilled by the Treasury Select Committee on the accountability of the FCA this morning.
He told the committee the FSA did not do a “particularly good job” in 2007-8 but that no-one in the industry saw the financial crisis coming.
His key role is to set up an effective board, he said, though he disappointed MPs by not being able to list the criminal sanctions the FCA will have at its disposal to fight financial crime.
Griffith-Jones said he would be talking to people outside as well as inside of the organisation about the financial services industry.
“You learn more talking to people outside of an organisation. I think I can play a geniuinely important role talking to lots of constituents,” he told MPs.
“I expect to be visible if needed, expecially with Which?, Citizens Advice and the bodies we regulate.”
Griffith-Jones said he was “on the whole entirely supportive of the RDR”, and that treating customers failry must be a “top priority” of the FCA.
However, he said sophisticated investors needed less protection.
“The key is segmentation. People experienced in financial affairs need a lower level of protection.
“Sophisticated investors are still quick to claim when something goes wrong, but there has to be a sense of if you play the game you have to be prepared to lose money.”
Responding to a question about incentives in financial services he said he views the whole rewards structure as “extremely important”.
“Incentives do have a major impact of how people behave. It is at the top of my agenda.”
Asked what the FCA would do about incentive structures it disaproved of, he said the FCA would “seek to ask and ultimately to insist that they are changed”.
The ‘twin peaks’ system of the Prudential Regulatory Authority and FCA will officially come into existence on 1 April 2013. This is dependent on the Financial Services Bill being approved by Parliament.
