The FCA is a child of crisis, says chairman

clock

The Financial Conduct Authority (FCA) was born in the aftermath of a crisis, so that is all it knows, but it has laid the groundwork for making markets work well again, its chairman John-Griffith Jones is expected to say in a speech on Thursday.

The financial services industry must now demonstrate it can conduct itself properly and operate once again under its "own steam", Jones will say in an address to the CASS Business School in London.

"The FCA is a child of crisis," he will say in the speech entitled Regulation in a Recovery. "I have argued this evening that we know how to make the new regime work well from a conduct perspective. But we are the means to the end, not the end in itself."

Though the regulator has a different "mindset" than was evident in the past, the need for effective conduct regulation remains essential because "some things have not changed", said Jones.

The need for consumer protection has if anything increased rather than diminished, particularly with the proposed changes to the pensions regime

"Egregious behaviour remains egregious. Our market integrity objective is not negotiable. The need for consumer protection has if anything increased rather than diminished, particularly with the proposed changes to the pensions regime.

"The inevitable complexity of some long-term financial decisions, the asymmetry of knowledge between producer and consumer, and the unfortunate history of products coming to market designed to benefit the industry rather than the public, demonstrate beyond all reasonable doubt the continuing need for an effective conduct regulator."

Jones will say the regulator has a rulebook "that looks a bit like layers of sedimentary rock" and represents "extremely hard work" to re-write, but that, with improving conduct, fewer new rules should be added to it. Its 11 principles, meanwhile, are "here to stay".

The FCA's goal is to be a preventative regulator, Jones will state, and there have been examples where this has demonstrably been the case, such as with its interventions on interest-only mortgages and interest rate hedging products.

Jones will conclude: "We regulators have a big job ahead of us, but modest as compared to the changes required of some of the firms we regulate. Their future behaviour will shape the future of regulation, and over time they will get, from Parliament, the regime they merit."

More on Income Protection

National Friendly joins the IPTF

National Friendly joins the IPTF

Latest member joins

Hemma Visavadia
clock 03 May 2022 • 1 min read
National Insurance increases could provide further impetus to income protection sales

National Insurance increases could provide further impetus to income protection sales

"The increases in NI make the potential savings greater"

Tony Müdd
clock 22 April 2022 • 4 min read
The Exeter records fall in Covid-related IP claims in 2021

The Exeter records fall in Covid-related IP claims in 2021

Pay outs totalled £10.4m last year

John Brazier
clock 11 April 2022 • 1 min read

Highlights

First episode of The COVER Review goes live!

First episode of The COVER Review goes live!

New monthly programme

John Brazier
clock 21 April 2022 • 1 min read
The Rising Stars of Protection: Adrian Benjamin

The Rising Stars of Protection: Adrian Benjamin

"Getting into the insurance industry is very difficult, I had to fight my way to get in"

Hemma Visavadia
clock 20 April 2022 • 6 min read
Where protection meets sustainability

Where protection meets sustainability

"Being a sustainable business means more than just meeting climate targets"

Hannah Godfrey
clock 19 April 2022 • 7 min read