ICT Views


I believe that there are three key roles regulators need to play…

by: (Course Director - Governance, Risk & Compliance) on

Before I comment on the three roles, I'll focus on what else Tracey Ms McDermott, Chief Executive of the FCA in the UK, said in her speech at the Mansion House in London on 22 October 2015

Let’s go for some bullet points!

  • The financial crisis and conduct failures identified since then have revealed deficiencies in the regulatory framework and structure
  • The response has been an unprecedented wave of legislative, structural and regulatory reform – and a critical review of the cultures, behaviours and incentives in all parties which allowed the situation to happen
  • The process of reform must be completed but it is obvious the intensity and volume of regulatory activity cannot be sustained
  • Although regulation is reactive, this is not necessarily A Bad Thing as it can lead to changes in behaviour. But there are risks in this because memories are short and we forget these lessons, especially when economies are stronger

The financial services industry will not disagree with these comments, especially over the intensity and volume of regulation. The acknowledgement of the regulatory shortcomings and maybe the over-reaction in response will be welcome.

The three key roles……

  • The referee – with more of a focus on driving the right incentives and conditions for ‘healthy, competitive and innovative’ markets
  • The policymaker – with a focus on creating the best environment to allow competition, and by developing existing regulation to deliver a sustainable long-term model
  • Being the commentator – analysing past performance, challenging the industry and finding new and innovative solutions to existing problems. Which will in turn allow competition to flourish.

Spot the common word: ‘competition’. And, as ICT courses teach our delegates, facilitating competition falls under the regulatory objective of delivering integrity in the market. Although the objectives do overlap, post credit crisis there has been more focus on ensuring confidence and stability, and in protecting consumers.

So, in conclusion, has the message changed, or is it changing to one where more parties in the market share some of the burdens of responsibility for past problems? And is the rebuilding now so mature and advanced that encouraging strong competition and innovation to return the UK financial services market to the one ‘driven by professional excellence, creativity and integrity’ is the priority? It all depends on your viewpoint. Have cultural and ethical standards improved or will it take a generation to fix the issues? Or, are we all still hampered by a zero tolerance mentality driven by the volume and intensity of fundamental shifts in regulatory focus, which stifles the ability to take sound, well balanced risks that will benefit all of our stakeholders?

In the words of reggae legend, Johnny Nash: ‘there are more questions than answers, pictures in my mind that will not show…’”

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