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FSA Fall Short on Investor Protection — WSJ

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The FSA’s principle-based approach to
regulation has won it a lot of favorable attention in the US. Leave it to the Wall Street
Journal
to weigh in with criticism for its failure to protect individual
shareholders in the UK. The Journal sees the FSA as trying to protect the
London marketplace rather than the individual investor and quotes Jim Cousins,
a member of Parliament, saying the SEC would have been tougher in cases like
the split-capital investment trusts.

The Journal story leaves a lot to be
desired, focusing on one or two cases and quoting Cousins and a Harvard
business prof—its comparison of the number of FSA staff at 2,700 while the US
has 15 times as many in financial services doesn’t mention that includes 50
separate state insurance regulatory bodies, many of dubious value.

Nor does it look at the way the SEC in the
past has chased after kids while ignoring the huge conflicts of interest in
major Wall Street firms that Elliot Spitzer uncovered as New York’s Attorney
General.

The differences between American and
British regulation are getting a lot of attention as many in the US including
Treasury Secretary Hank Paulsen argue for lighter regulation to keep New York
competitive with London. See my blog
review of commentary
by Michael Bloomberg, Sen. Charles Schumer and skeptic
Ben Stein—an economics writer perhaps better known for his role as the teacher
in Ferris Bueller’s Day Off.

A lot of complex issues here and they
deserve better treatment than the Journal’s story.

Tom Groenfeldt

RegulationCategories
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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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