18 March 2009
City of London response to the Turner Review of the FSA
Summary:
- Overall response to Turner Review
- Simple, robust, outcomes-focussed regulation
- Supervision and enforcement
- Regulation and London’s competitiveness
- The European context
- Non- bank financial institutions (hedge funds, private equity
etc)
- Remuneration
Stuart Fraser, Chairman of Policy of the City of London
Corporation, said:
“I welcome today’s review as an excellent starting point for an
important debate. It is important to remember that these are only
proposals – we now need a detailed debate at UK, European and
global levels to consider the complex issues raised by Lord
Turner.
There is no doubt that some aspects of regulation and
supervision have failed. The status quo is not acceptable and we do
need change. But the City needs change which genuinely makes things
better, not change for change’s sake.”
“Mervyn King was spot-on when he called for “simple, robust”
regulation. Creating new rules for every eventuality will never
work. Instead, regulation must be focussed on outcomes and applied
intelligently and effectively.”
“Regulation is toothless without strong, effective supervision.
There is no point writing new rule books if the rules are not
properly enforced.”
“The City’s competitiveness as a world-leading global financial
centre depends on the quality of its regulation. UK regulation can
be a competitive advantage to the City if it offers the
predictability, quality, fairness and transparency investors will
seek in the post-crunch world.”
“We must remember that the whole UK debate sits within our
obligations in the European Union. UK rules in areas such as
capital adequacy and accounting standards are decided in Brussels.
So the UK must engage strongly with the European policymaking
process to ensure that new EU regulation reinforces London’s
competitive position as a global financial centre.
“I support the view that financial institutions should be
regulated by their economic function, not their legal status. If it
looks like a bank and acts like a bank, it should be regulated like
a bank.”
“The issue of remuneration in the financial services industry
has become a political football, which is not helpful. Remuneration
should be linked to long-term performance and profitability, taking
account of risk management. Any proposals to regulate remuneration
in the UK must be considered in the global context.”
Ends
Notes to editors
About Stuart Fraser: Stuart Fraser is Chairman of the
Policy and Resources Committee of the City of London
Corporation.
About the City of London Corporation: The City of London
Corporation provides local government services for the Square Mile,
the financial and commercial heart of Britain. The Corporation
works nationally and internationally to maintain and enhance the
City as a world-leading international financial and business
centre. It also serves London and the UK with special
responsibilities such as the Barbican Arts Centre, the Central
Criminal Court at the Old Bailey, 10,000 acres of open space
including Hampstead Heath and Epping Forest, three wholesale food
markets, three inner-London City Academies, the City Bridge Trust,
economic regeneration programmes in neighbouring boroughs and
acting as London’s Port Health Authority.
www.cityoflondon.gov.uk
Press enquiries
Laura Citron in the City of London press office:
T: 020 7332 1835
M: 07784 295 736
E :
laura.citron@cityoflondon.gov.uk