Having viewed the spectacle of the Financial Services Authority beating themselves up and wringing their hands over the Northern Rock it is perhaps time to give some thought to the nature of Self Regulation.
SROs [Self Regulatory Organisations] were it was felt, back in the 1980s, to be the safest and sanest way for public concerns about the finance sector to be appeased without full-blown Government intervention/regulation.
But where does the Government end and the FSA start? Or vice versa? For more than twenty years the finance services industry has viewed the various incarnations [Lautro,PIA now FSA] as ‘The Regulator’ on a habitually ‘them and us’ basis.
Concerns of the public right now are that the FSA ‘missed’ the Northern Rock issue - a potentially lethal business model operating in markets on the verge of collapse. Past concerns of the industry were that the FSA had to earn its keep and regulated and fined accordingly.
So how different would regulation be if it came direct from Government? And where would the buck stop?
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