The use of league tables in financial services
| DOI | https://doi.org/10.1108/eb025048 |
| Published date | 01 March 2000 |
| Pages | 256-268 |
| Date | 01 March 2000 |
| Author | Rob Jones,Kevin Keasey |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 8 Number 3
The use of league tables in financial
services
Rob Jones and Kevin Keasey
Received: 29th March, 2000
Newcastle Business School, University of Northumbria, Newcastle, Newcastle-upon-Tyne, NE1 8ST;
tel:
+
44
(0)191 2274622; fax: +44 (0)191 2273303; e-mail: rob.jones@unn.ac.uk
Rob Jones is Senior Lecturer in Financial
Management at the University of Northum-
bria at Newcastle. He lectures and
researches in the areas of financial institu-
tions and markets, investment and finan-
cial regulation. He is also a chartered
accountant who has worked in accoun-
tancy and financial services for Price-
waterhouseCoopers, Prudential Assurance
and Provident Financial plc.
Kevin Keasey is the Leeds Permanent
Building Society Professor of Financial
Services and the Director of the
Inter-
national Institute of Banking and Financial
Services, Leeds University Business
School. He specialises in all aspects of
finance and financial markets, accounting,
strategy and organisational design, corpo-
rate governance and firm enterprise. His
previous senior posts include Professor of
Finance and Accounting at The University
of Leeds and Reader in Finance and
Accounting at The University of Warwick.
ABSTRACT
This paper considers the principles underpin-
ning the proposals for a comparative informa-
tion scheme for personal financial services
products. In October 1999 the Financial Ser-
vices Authority (FSA) issued Consultation
Paper 28: 'Comparative
Information
for Finan-
cial Services' which outlines the preliminary
work
carried
out by the FSA and its consultants
in this area. The scheme has some similarities
to the league tables found in the
education sector
and it is likely that, if implemented, the pro-
posed
scheme
will
become
known as the 'Finan-
cial Services League Tables'. The consultation
paper identifies specific outcomes which the
FSA states arc its policy objectives in this area.
These objectives are in the areas of
consumer
knowledge and competition.
This paper considers the rationale for the
proposed scheme and looks at its potential bene-
fits and problems. To do this it draws on both
the FSA's Consultation Paper and the estab-
lished body of
research
into the effectiveness of
performance measurement and league tables.
The paper
considers
the issue that in
order
to be
worthwhile a performance measurement system
must generate a net benefit. Specifically, the
costs of setting up and maintaining the system
plus the imperfections in the information gener-
ated by the system must be outweighed by the
value of the information to its users.
The costs of setting up and administering a
system
for financial services league tables can be
quantified.
The potential
both
for imperfections
in the information generated and in the way in
which that information is used are not so easily
quantified,
however, and require careful analy-
sis.
This paper
concentrates
on providing analy-
sis of
these
potential imperfections. It
concludes
by discussing whether these potential problem
areas are of
sufficient significance
to undermine
the purpose and value of the proposed league
table scheme.
Journal of Financial Regulation
and Compliance, Vol. 8, No. 3,
2000.
pp. 256-268
© Henry Stewart Publications,
1353-1983
Page 256
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