Taking on the FSA at the AGM

As I approached the registration desk and collected my identity badge I was glad I’d followed my better senses. Blending in as I seated myself and took in the lavish corporate backdrop, it was clear that upholding sartorial conventions is taken seriously. As the Libor scandal envelops the financial world perhaps I wasn’t alone in quipping to myself that these conventions seem to be taken rather more seriously than following financial regulations or, dare I say it, any ethical code.

While Lord Turner and the other chairmen discussed the FSA’s ongoing prudential reform process, I planned my question. Although talking at length about how to regain the trust and confidence of the public, the fact that the FSA acts primarily in the interests of the finance sector was woefully overlooked.

WDM has recently reported on how regulatory capture has meant that the FSA is lobbying for the City in European negotiations on regulating finance. Financial speculation is pushing up food prices, squeezing household budgets in the UK and making food unaffordable for millions of people across the world. Yet the FSA is railing against tough measures proposed to curb speculation, instead advocating for self-regulation. It would appear then that the culture of self-interest and entitlement that caused the financial crisis is still a long way from being addressed.

The microphone was in my hand and the floor was all mine. I’d managed to overcome the nervous apprehension of addressing a couple of hundred suits, shareholders and CEOs so I challenged the FSA to ensure that its successor, the Financial Conduct Authority, would do a better job of representing the interests of the public than the FSA has.

It could do this by supporting the introduction of position limits on the commodity derivative markets. This would bring European financial legislation in line with recent US reforms and set consistent, transparent and adaptable limits on excessive speculation. Predictably, at the AGM Lord Turner denied their fundamental importance, despite the fact that they are the norm for regulating markets around the world.

Stating that “regulators don’t have the responsibility to support the competitiveness of the finance sector” and that “the role of regulation and promotion are very separate things”, Lord Turner was adamant that the FSA’s decision not to support strong rules was independent. Funny, then, that the FSA is funded by the City; that its staff are frequently regulators one minute, bankers the next, before finding themselves at the FSA again; and that the only beneficiaries of rampant speculation are bankers themselves.

Until there is transparency, greater public consultation and the eradication of groupthink in the finance sector, it will continue to be plagued by a crisis of trust and reputation and people will continue to feel the effects of dangerous financial practices.

Take action! Send an email to the FSA's chairman, Lord Turner, telling him that the FSA should not be lobbying on behalf of the banks it is supposed to be regulating. Once you've emailed, give the FSA a quick call to check that they've taken notice of your email.