Government intervention and regulation

 

All those interviewed expected the intervention of government and tougher regulation of financial services to continue. Priorities identified by those interviewed included:

  • Capital adequacy - more needed to be done to set risk-adjusted capital levels for particular activities rather than simply demanding more, and possibly inappropriate, capital-raising;
  • Alternative investments - deep concerns over the new European Union Directive, seen as unnecessary and by some as politically motivated;
  • Changes to the regulatory environment to encourage more long-term savings.

 

Lord Turner's comments on the absence of social utility in many financial products divided opinion, though the FSA Chairman was unrepentant. There were also divisions over separating retail banks from `casino banking': opponents said the combination had not caused the financial crisis.

 

However, there were concerns that the UK industry could find itself disadvantaged in competing internationally if the British authorities took more aggressive action than their overseas counterparts.