Pros/cons of the regulatory structure (feedback)
Roles and accountabilities in the new regulatory system. (Click to expand)
Source: HM Treasury (2011) A new approach to financial regulation: the blueprint for reform, June 2011, permitted under the terms of the Open Government Licence. © Crown Copyright 2011. http://www.nationalarchives.gov.uk/ doc/ open-government-licence/p. 8
Time will tell if the new regulatory structure is too ‘engineered’. Certainly the splitting of responsibilities could lead to problems – although the FCA and PRA have set out plans about how they will communicate and work with each other in Memorandums of Understanding.
It does seem a little odd to have unified regulation under the FSA in 2001, only then to divide up regulation again 12 years later.
Concerns have been raised within firms about the regulatory overload and the associated cost of regulation, with some fearing that the need to focus on regulation diverts management from spending time on the core business activities.
However, experience of the new regulatory approach supports the view that it is much more forensic and robust than that applied by the FSA.
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