FSA's expanding universe is a bewildering black hole for cash - Telegraph#postComment#postComment: "Just look at the figures. Ten years ago, the FSA employed just the 2,030 pointy-headed regulators, beavering away with an annual budget of £196m. Now staffing is heading for 3,260 by the end of this financial year, with productivity – rather predictably – going in the opposite direction. The budget's gone galactic, with the FSA now requiring £455m a year. We all pay because the 27,000 regulated firms just pass on the costs to the consumer."
Regulation is bust because of the regulators themselves, the 740 BofE banking regulators were moved over to the FSA together with their rickety computer system, dusty files and gold-plated pensions (which have been whittled down so hence the rush to get back from whence they came). These banking regulators must have been busy doing anything other than regulating, shopping at Canary Wharf perhaps, Hector had no control over the complicated mess created by the 'merger' of 12 regulators over a decade ago, the BofE crowd were on the top floor, PIA underneath with the friendly society supervisors in the sub vault, none of them talk to each other, it is an epic struggle for turf which will carry on after the Tories (if they win and if we can't make them see sense) dismantle it and cobble togther two, or perhaps THREE new regulators from the constituent parts, whatever they happen to be.
How do I know this? Because people who used to work there and some who still do told me so.
Hector should stay even if it is just to point at the pitfalls of what the Tories are doing, and of course to witness at first hand the mayhem the RDR will create.
As far as passing on regulatory costs to clients is concerned I think you will find that small firms will find that impossible unless they start charging higher fees in which event the regulator will kick up a fuss.
I could write a book about the failures of regulation but is there a market for such a depressing read?