Last night, the Chancellor outlined his plans to reform the regulatory structures that oversee key parts of the UK economy and in particular, the financial services sector.
Restructuring brings upheaval and insecurity so the big challenge facing those leading the transition will be to ensure that the Financial Services Authority in particular doesn’t lose sight it of its current day-to-day responsibilities. It cannot be distracted from the ongoing regulatory demands of a fragile economy and financial services sector where building confidence and trust is a key requirement.
The Bank of England and the new Consumer Protection and Markets Authority will need to quickly establish strong, collaborative relationships with those who can help them deliver on their remit. For example, as our Financial Services Faculty recommended in the final report of its Audit of banks: lessons from the crisis project, regulators should have a closer dialogue with the audit profession. It will be better to get this in place from the outset!
From the accountancy profession’s perspective, the unanswered question is will the Financial Reporting Council still be our regulator or will it be incorporated into the new structure. There does need to be clarity on this quickly.