But the light-touch regulatory climate in which the expansion occurred contributed to the view of Mr Goodwin that he need not take the FSA seriously. The government’s approach was highlighted in a speech by Tony Blair in 2005 who accused the FSA of being “hugely inhibiting of efficient business by perfectly respectable companies that have never defrauded anyone”. The Blair line was later pursued by prime minister Gordon Brown and the Treasury.
This type of interference is not new to the longer serving staff members at the FSA who were used to firms trying to reduce the regulatory burden and compliance cost by lobbying government and which in turn could lead to calls from Treasury for the FSA to ease up. Even Mr Brown eventually understood the rationale behind the attention he received from Mr Goodwin. It was certainly the case that Mr Goodwin visited the FSA to make his views known and in the ‘light-touch’ environment, those views were taken seriously. On one occasion, it was rumoured inside the FSA that during one of Mr Goodwin’s visits to complain, he was told not to worry and that the FSA would “sort it”.
The light-touch regime was not endorsed by all inside the FSA but many had to grit their teeth and embrace the mantra or leave – this is not covered in Mr Martin’s book. The views of current and past FSA employees are restricted by confidentiality limitations imposed by contracts of employment although many have spoken off the record.
The Blair speech so upset the then FSA chairman, Callum McCarthy, that he felt it necessary to write to Mr Blair saying that the FSA’s approach was “proportionate”. So concerned was he that Mr McCarthy became famous inside the FSA for asking staff if they felt the FSA had got the balance right? Well, who was going to disagree with the chairman? But, clearly, he wasn’t sure.
Nevertheless the FSA was worried about the influence of Mr Goodwin but its concerns were rebuffed by the RBS board who claimed the board provided the necessary challenge, supported by a new chairman Tom McKillop (appointed late 2005). But by early 2007, Mr McKillop felt it necessary to ring Mr Goodwin to ask about the rumours reported in the press about RBS’ interest in ABN Amro – how could the chairman not have known about such a possibility?
In July 2007, the takeover of ABN Amro was announced after Barclays had thrown their hat into the ring. Mr Goodwin once again saw the takeover as a contest with Barclays that must be won at any cost.
