14th November 2011

IFA Letter of the week

Mr Stephen Williams, MP
House of Commons
LONDON SW1A 0AA

REGULATION OF THE FINANCIAL SERVICES INDUSTRY

Thank you for your letter dated 31st October plus enclosures. We could go round and round indefinitely challenging the veracity of the FSA's claims, not least how Hector Sants' overseas travel expenses of £23,516 chime with seeking to minimise expenses or why it was necessary for Margaret Cole to rack up £6,923 on a four month sojourn to Hong Kong and Beijing. Surely the FSA doesn't regulate any financial services firms in either Hong Kong (which has its own regulatory authority) or mainland China. What is the FSA's interest or involvement in financial services in mainland China? And why was it necessary for her to spend four months there? Four months!!?? Apart from anything else, her position at the FSA is director of enforcement (of action against UK firms found to have committed regulatory breaches). Surely she didn't spend four months doing the same thing in China or merely advising the Chinese authorities on how to enforce breaches of their own regulations??

What was the justification for Adair Turner running up expenses of £42,479 visiting places such as Canada and South Korea? Again, Canada has its own regulatory authority and I would ask what possible involvement the FSA might have with Korea's financial services industry?

Ms. Forseke mentions the prescribed maximum costs for overnight stays in foreign hotels but what she doesn't mention is the enormous costs of first class ~ not even business class ~ air travel for those who travel abroad.
And Christopher Boyce's claim, in his letter to you dated 6th April this year, that the Statutory Code of Practice For Regulators "applies when the FSA determines any general policy or principles" might have marginally more credibility were he to cite any examples.

As you are aware, the TSC in general and Andrew Tyrie in particular are increasingly concerned by the FSA's lack of accountability. Just this week we read of calls from the chief executive of Which? Magazine for the FSA to be made more accountable.

But, apart from all that, I do object strongly to the patently mendacious claim routinely trotted out by Mark Hoban that the FSA is an independent non-governmental body whose operations are independent from government. If that is true, then could you please ask someone to explain why the FSA's web address is fsa.gov.uk? Does any other non-governmental body of any description exist which is allowed to have the letters gov as part of its web address? This is and can only be the web address of a government body, in this case one separate from government only by the fact that it has free licence to raise its endlessly escalating budget by way of compulsory levies on the financial services industry, on the regulation of which, again as you are well aware, it hardly has a shining track record.
And now we hear from Hector Sants that the cost of the FSA rebadging itself as the FCA ~ the same people at the same address doing much the same jobs ~ is going to cost the industry a staggering £50,000,000!!

I appreciate your efforts, Mr Williams, but I really do think you're being fobbed off. The FSA just tells you whatever it likes and, with all due respect, neither you or any of your colleagues representing aggrieved constituents such as me, are really in any position to challenge these statements. Hopefully, as appears to be the case thus far, the FSA will not find it so easy to brush off Andrew Tyrie. But thank you anyway for your efforts.
Yours sincerely

Julian Stevens

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