View from the Chair: New Lords committee can help UK regulators get back on top

Shortly after the financial crisis in 2008 I met with the Chinese Securities Regulatory Commission. Up till that point, they said, they had seen the FSA and SEC as ‘teachers’. The crisis, according to them, had turned the tables: the teachers had failed and the ‘students’ would lead the way.

That was all some time ago and few would argue that the CSRC was now the master, but you get the point. The FCA and the PRA do not have the status and respect on the global stage that they once had.

The creation of a new committee in the House of Lords to oversee the FCA and the PRA is to be welcomed. Its objective should be to reposition the UK regulators as the teachers on the global stage.

Part of the rationale for the creation of this new committee is concern around the way in which the regulators will balance their traditional roles as regulators with their new secondary objectives to promote growth and international competitiveness. Whether it is sensible for regulators to have such secondary objectives is a moot point, it could be argued that global competitiveness is itself a by product of world class regulation. These new objectives have made the regulators jobs harder and will not, of themselves, lead to better regulation or greater global respect.

The first job of the new committee is to listen. It needs to listen to CEOs and Boards and understand the frustrations and concerns of the regulated community. It should also look at how overseas regulators are working and identify best practice, it should look at the ways in which the regulators interact with the firms that they supervise and ask the question – do the regulators really understand the businesses they oversee? And if not what more could be done. Is the FCA the only serious financial services regulator that thinks that it can do its job without a regular programme of actually visiting the firms that it supervises?

The new committee also needs to challenge the regulators, particularly the FCA, in relation to the way in which it uses its resources. Whilst it is understandable that a major focus is on systemically important firms, that is also the area where the FCA has been least effective in terms of enforcement and holding individuals to account. There needs to be greater alignment between the resources it deploys and the results it gets.

We wish the Committee well.


‘View from the Chair’ is Bovill’s regular column from our Executive Chair Ben Blackett-Ord who founded the firm in 1999 and led it as CEO until 2022. Ben continues to support Bovill’s executive team and clients, as well as being a prominent figure in the industry.