2011-06-14
By
In advance of the publication of the Government’s publication of new legislation to reform the UK’s financial regulatory system, the Chartered Insurance Institute (CII) calls for the Government to go beyond process-driven regulation and demand a new culture of regulation.
In its paper, A new approach to financial regulation – embedding professionalism, the CII outlines how we should learn from recent experience, which clearly shows that a process-driven approach to regulation has proven ineffective.
Commenting on the CII’s proposals launched today, Dr Alexander Scott, chief executive of the CII, commented: “It’s self-evident that prevention of financial scandals is infinitely preferable to clearing up after them.
“Our experience as the UK’s largest financial services professional body, tells us that the culture of a firm, not its processes, lies at the core of how a firm behaves and treats its customers. The FSA itself has acknowledged this fact. We want to see this reflected in the new regulatory approach being developed and ask the Government to put consumer interests at the heart of the regulatory approach by developing a proportional risk-based focus to regulation.
“This approach would take into consideration factors that strongly indicate a firm has a commitment to the highest professional standards for example, the general insurance sector’s voluntary initiative, the Aldermanbury Declaration. These factors would include a demonstrable commitment to the highest levels of technical expertise achieved through externally tested qualifications along with completing ongoing professional development and commitment to higher standards of professional behaviour. An increased scrutiny of firms and individuals who fail to exhibit such professional commitment would focus regulatory activity where it would be needed most.”
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