FCA: We are not an aggressive regulator

The Financial Conduct Authority said it is wrong for the industry to think that it is an aggressive regulator, stating that it has a “very balanced” style and often will be working with industry to address problems.

In a speech at City and Financial’s conference on FCA regulation, Clive Anderson, director of supervision at the Financial Conduct Authority highlighted that that the FCA is working closely with industry, citing the recent interest-only thematic review as an example.

He said: “Our style is to be very balanced and often it will be working with industry, so our work on interest-only mortgages that we published some weeks ago and those...will see that actually quite a lot of it is how industry is working with us to address the problems.

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“So it will be wrong to thing that the FCA is an aggressive regulator. It’s very important that we work with the industry and that the industry wants to work with us. Clearly, if they don’t, things will get a little awkward but we would hope that, moving forward, a large part of the industry will recognise the issues that we think are important and are prepared to work with us.”

Mr Anderson also reiterated that the regulator wants to move from being a reactive-only supervisor to “a more preemptive approach”.

In particular, he highlighted that the FCA wants to move away from “purely looking at controls” to looking at how businesses are run, flagging up that the auditing approach “is not working”.

He said: “That’s because focusing on narrow compliance and a set of rules does not always ensure the right outcome for consumers. We want firms to think harder about how they put the interests of their customers at the heart of their business but that is a lot more than delegating regulation to a compliance firm.

“I think it would be a mistake for firms to think what we are about is more and more rules and more is more about how frontline management run their business and where they put the customers.”