Regulation in the time of Covid: Part 3 (72) 27/4 - FCA Chair's speech (2): Basics

Starting on 16 March last year, I began writing daily blogs about the impact of the Covid crisis on financial regulation. Other issues, notably Brexit and digitisation, have featured as well but Covid remains the dominant driver of regulation as we enter 2021.

In Charles Randell's most important speech since last June, the FCA Chair last week set out how he thinks the FCA needs to change for the post pandemic world. This week I'll be covering its main themes.

By "basics" the FCA Chair means the FCA's "four priorities for basic consumer protection: safe and accessible payments; sustainable credit; clear and safe investment choices; and fair product terms, including price." As the speech implies, these aren't new, and he highlights a recent review showing that some high cost credit models that are "indifferent" to a loan's affordability. The twin challenges facing this type of tight focus have historically been (1) the broad definitions of these priorities (i.e. they can be read as not excluding much); and (2) the intrusion of events. But continue to loom large.

In 2002, almost 20 years ago now, the FSA's first proper (post FSMA) Business Plan contained a notorious 46 priorities. the remit was narrower then but the great majority of these would have fallen into the "investment choice" and "product terms" priority boxes. The language here is at a much higher level but within each of these 2021 basics there will be a range of potential initiatives and it's at this level that the real prioritisation will happen or not. The July Business Plan will be the first real insight into how tightly the "new" FCA wants to focus its attention.

And by the time that first Business Plan appeared, events had already intruded. The FSA had been damaged by the Equitable Life scandal, which broke in late 2000, and Independent Insurance had also failed. And on a broader canvas, the dotcom bubble had burst and the 9/11 attack had taken place. Much as the FSA leadership of the time would have liked to focus on its own priorities, these events dominated their attention and would define the regulator's history and reputation at least as much as its own priorities.

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If you have a few minutes, I recently published an article looking at the regulatory top 10 themes for financial services.

And last but not least, you can watch the latest financial services regulatory update webinar, where David Morrey and I dissect what's really happening in regulation.