Steve Barclay is the Conservative Parliamentary Candidate for North East Cambridgeshire and has worked for over a decade in the financial services industry, including in insurance, banking and for the city regulator. His current role involves financial crime prevention for a large bank.
Many commentators and politicians have recently called for more regulation of the financial services industry. Often these have been the same voices who previously said light touch regulation was essential for the competitiveness of the City of London.
The call for more regulation ignores just how many rules we already have. The FSA Handbook runs to over 6,000 pages. Adding an extra 500 pages after the horse has bolted is not the answer. Nor is yet another corporate governance report, which will do little to shift the culture of firms away from their focus on the short term.
Instead we should enforce existing rules to drive good behaviour. It is striking that so many of those who broke rules in recent years still remain in their job, or in similar roles with other firms.
Without individual enforcement, it will always be tempting for executives to play lip service to rules rather than put their bonus at risk. Most senior executives know plenty of colleagues who have been fired for failing to meet their target. Few know colleagues who have been subject to regulatory enforcement action. None I suspect have colleagues who have personally paid a fine to the regulator greater than a single year's bonus. Missing the target set by their Chief Executive or institutional shareholders is still a greater threat to a career or bonus than the threat posed by the regulator.
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