Almost, at least. Writing in Friday’s FT, Gillian Tett sees failings at the FSA too. Forget though, the chorus of voices clamouring for regulatory rule changes. The rulebook isn’t necessarily the problem. The culture is. The FSA needs to be more efficient, more powerful, more paid, more… maverick.
First, there is a strong case to raise the salaries of supervisors dramatically. London cannot hope to remain a world-class financial centre unless it seriously invests in infrastructure – be that the rail network, or regulatory skills.
But, second, there is a need to rethink the recruitment process. Yes, the FSA certainly needs to have ex-bankers in its ranks; but it also needs non-bankers or, at least, maverick voices who can throw hard questions at 30-something bankers – and the supervisors themselves. If there is one key moral from this decade, it is the danger of letting group-think spin out of control. And that point applies as much to the sorry sagas of Northern Rock and Bear Stearns – as the FSA and other western regulators too.
Less box-ticking then. Less silo mentality. Less impotence in the face of the City. Less…
As part of our review work we interviewed 65 FSA staff and former staff. We also reviewed 129 files (lever arch or equivalent) and a similar number of electronic files.