Does regulation make it worse?
| Date | 01 June 2004 |
| Published date | 01 June 2004 |
| DOI | https://doi.org/10.1108/13581980410810713 |
| Pages | 106-110 |
| Author | David Jackman |
Comment
Does regulation make it worse?
David Jackman
Received: 25th March, 2004
London Metropolitan University, London City campus, 84 Moorgate, London EC2M 6SQ, UK;
tel: +44 (0)20 7133 4202; e-mail: david@davidjackman.org; www.ethicsfoundation.com
David Jackman is Chairman of The Ethics
Foundation, a new organisation promoting
ethics education in the broadest sense,
including re-establishing the Ethics Forum
for Financial Services he started at the
Financial Services Authority (FSA). David
is Visiting Professor of Business Ethics
and Regulation at London Metropolitan
University, with which he is also currently
establishing the London Financial Acad-
emy. Previously, as FSA Head of Industry
Training and Business Ethics Adviser, he
was architect of the FSA’s Training and
Competence regime and Sourcebook. He
was the first Chief Executive of the Finan-
cial Services Skills Council, and has also
held senior posts at IMRO and SFA, as
well as co-founding the Securities Institute.
David is Chairman of the British Standards
Institution (BSi) Committee on Financial
Services, a member of the BSi Committee
on Sustainable Development, and also
operates a training and competence and
business ethics consultancy and courses
company.
ABSTRACT
KEYWORDS: regulation, FSA, business
ethics, Ethics Foundation, ethical codes,
corporate governance, FSMA 2000
What is the purpose of regulation? What are
we really trying to achieve? What should the
world look like after it has been regulated?
Many ‘stakeholders’ assent to the concept of
regulation as a tool to fix a problem, but is
there any clear idea about what the outcomes
should be? It is very easy to become enmeshed
in the mechanisms and processes of compliance
without developing a grasp of the principles
underlying regulation. This paper argues that
regulation is based on ethical drivers that, if we
understand them better, will help direct us
towards a more effective and efficient system.
Incoherent and excessive regulation can dimin-
ish individuals’ and firms’ ability to comprehend
these principles and apply them in everyday
judgments. A culture of dependency can result.
Increased regulation of an undirected kind could
indeed make matters worse.
We put so much effort into consultation,
writing rules and compliance, is it sacrile-
gious to ask the question: does all this
effort make much difference? After all the
regulating, is the world a better place?
Well, at the outset, I must make it clear
that I do think regulation has a place — an
important place. But I also believe, having
worked in four regulators, that regulation
does have limitations, and that we should
be aware of these limitations in framing
regulatory strategy and defining what
firms’ compliance is trying to achieve.
I also hold that regulators need to walk a
very narrow path. There is a fine line
Page 106
Journal of Financial Regulation and ComplianceVolume 12Number 2
Journal of Financial Regulation
and Compliance, Vol. 12, No. 2,
2004, pp. 106–110
#Henry Stewart Publications,
1358–1988
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