Labour's proposals for regulation into the 21st century
| DOI | https://doi.org/10.1108/eb024916 |
| Pages | 115-117 |
| Published date | 01 February 1997 |
| Date | 01 February 1997 |
| Author | Mike O'Brien |
| Subject Matter | Accounting & finance |
Labour's proposals
for
regulation into
the
21st century
Mike O'Brien
MP
Received:
7th
February 1997
House of Commons, London SW1A 0AA
Journal
of
Financial Regulation
and
Compliance Volume
5
Number
2
It
is
clear that
the
regulation
of
the finan-
cial services sector
in
Britain needs reform.
The aim should
be to
ensure that high stan-
dards
are
maintained
and
that consumer
protection
is
enhanced.
PRACTICAL APPROACH
Over-regulation produces unnecessary
bureaucratic burdens, stifles initiatives,
hampers success
and
destroys businesses.
Conversely, inadequate regulation risks
avoidable failures, creates
a
lack
of
confi-
dence
and
destroys businesses.
New Labour proposes
a
balanced, practi-
cal approach
to
regulation. Past debates
among political parties have centred
around which type
of
regulation
is
most
ideologically sound. Labour
has put
that
debate behind
it.
Instead
we
are concentrat-
ing
on
creating long-term confidence
in
the industry.
THE TAYLOR REPORT
Recently Michael Taylor published
a
report
on the
future
of
financial services
regulation.
In
many ways
it was a
watershed.
The report
was
published
by
the
Centre
for
the
Study
of
Financial Services Innova-
tion.
It
proposed
a
'twin peaks' format
for
regulation.
One
peak would consist
of a
Financial Stability Commission. This peak,
regulating banks
and
building societies,
would also include some
of
the
current
functions
of the
Securities
and
Futures
Authority (SFA). The other peak would
be
a Consumer Protection Commission,
responsible
for
dealings between financial
institutions and
the
retail customer.
The report
was
a
watershed,
not
only
because
of
the strength
of
its argument,
but
also because
of
the
reaction which
it
pro-
voked.
The report
was
welcomed
by
both
Richard Farrant,
the
Chief Executive
of
the SFA,
and
by
Collete Bowe
at
the
Per-
sonal Investment Authority (PIA), despite
the fact that both institutions would disap-
pear under
the
proposal.
The nature
of the
debate about
the
future
of
regulation
in
financial services
has
changed.
It no
longer centres around
whether
or not
there should
be
change,
rather how that change should take place.
The report also provoked
the
current
Economic Secretary, Angela Knight
MP,
to nail
the
Government's colours firmly
to
the self-regulatory mast.
It seems that Ministers have
not
realised
that
the
debate
has
moved
on;
that
the
intellectual ground
has
shifted from under-
neath them.
My view
of
the
Taylor report
is
that
I
admire
the
strength
of
the
argument
but
do
not
accept
all of
the conclusions.
Journal
of
Financial Regulation
and Compliance, Vol.
5,
No.
2,
1997.
pp. 115-117
© Henry Stewart Publications,
1358-1988
Page 115
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