The FSA's new Chief Executive John Tiner yesterday told a City audience: "Firms and consumers have a mutual interest in the market working better and this means having more capable and confident consumers who can identify their needs and then know what to do about them. We think there needs to be a major step change in activity to educate and inform the consumer and that the admirable, but patchy, efforts of many private and public sector bodies working in this area need to coalesce around a national strategy for financial capability.
"I will set up and chair an Advisory Group charged with establishing, by 31 March next year, a clear view of what the industry, the Government and other parties should best do. Since the FSA has a specific statutory objective to promote understanding of the financial system, we believe we have a natural role in leading this strategy, but that its implementation must be in partnership with firms, employers, trade unions, government, not for profit organisations, the media and so on.
"We will set out, at the same time as I announce the members of the Group, our initial views on how the FSA can best add value and provide leadership. The prize here is very great indeed. If capable consumers acting collectively can be a more influential force in the market there could be a consequently less rigorous regulatory regime."
Assessing product risk
"We have been working for some months in developing what we call, a 'product risk framework'. This is a tool that will help us to assess the risks to consumers of different products being launched or marketed by firms. The framework has three dimensions: the inherent characteristics of the product; the controls firms have in place around the marketing of it; and the target audience of consumers for the product. This is not product regulation through the back door, but a tool to provide an early warning of products that may be about to be launched or are circulating in the market that present particular dangers to consumers."
John Tiner said the FSA was an organisation focused on delivery and must have a "can do" approach.
"We need to be able to act swiftly and decisively, when necessary, with our people empowered so that decisions are taken at the right level and at the right time. We need to build, or develop with our business partners, an efficient, cost effective system for handling the vast amount of data once mortgages and general insurance come into our remit. And, we need to be an organisation that firms, consumers and our other stakeholders find easy to do business with, even if the answer to a question is not the one the questioner would like. "One area in which we will be looking - I hope for the benefit of all our stakeholders - will be to rationalise the number of policy initiatives we bring forward through the Consultation Papers we publish. I do not apologise for what has gone before. Next Monday, will see the publication of our 200th Consultation Paper, but up to now we have been in the policy development and reform phase of our evolution. We must now give firms and their customers, as well as staff at the FSA, time to become familiar with the new requirements and for them to become embedded in the marketplace. Come the end of this year we will have published around 60 consultation and discussion papers. Our aim for next year is to cut this number in half."
Background
- John Tiner was addressing a Corporation of London dinner at the Mansion house in recognition of the Financial Services Authority. His speech is available on the FSA Website www.fsa.gov.uk
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection of consumers; and fighting financial crime.
- The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.
