A month can be a long time in regulation (22/157)

This is the latest in the series of daily blogs on financial regulation that I began posting on my first day of Covid wfh, 16 March 2020. I hope you enjoy and find useful...

The minutes of the FCA's September Board have just been published and it's salutary to read them in relation to the regulator's evidence to the TSC (Treasury Select Committee) earlier this week.

Much has changed in between...

Notably: (i) the gilt market has stabilised after BoE's intervention that began the previous day (28/9); (ii) we have a new Chancellor and a new PM; (iii) proposed wording of the Government amendment to the Financial Services & Markets Bill, to give HMT an intervention power, has been promised and then delayed; and (iv) the BoE raised interest rates by 3/4%, ahead of an Autumn Statement which was announced for 31/10 then rescheduled to 17/11.

It's surprising that the minutes don't even reference the gilt crisis, given the FCA regulates many of the firms involved. This suggests its involvement was small at the outset and only grew as the crisis evolved. By the time of the TSC session, the FCA was clearly immersed in the issue, but I suspect it had been a rapid learning curve.

Meanwhile the proposed intervention power has become something of a cause celebre, and if central bank independence was the theme of Sept/Oct, regulator independence seems set to succeed it...

In their respective TSC appearances and Mansion House speeches, both PRA/Bank and FCA explicitly opposed an HMT intervention power. Such public opposition to Government legislation is vanishingly rare and seems, to me, significant in itself. These disagreements occur periodically but surfacing them might herald a new transparency. Either way, the pressure has increased for all concerned.

Elsewhere, the Board minutes reveal a welcome focus on planning for 2023/24, its integration with the 3-year strategy, and the continual need to reprioritise resources; previous FSA/FCA Boards haven't always been so realistic about these tensions and choices.

However, the TSC session shows how hard such planning is at the moment. On several issues, including the Consumer Credit Act and BNPL (buy now pay later), all of which materially affect planning and prioritisation, the FCA is waiting for the Government.

Pretty much everyone wants to see regulation become more predictable. At present, that aspiration feels as distant as I can remember.

I?also publish a?weekly regulatory update. If you found this interesting,?sign up?to receive it direct into your inbox each week.

Don’t forget our monthly financial services regulatory update webinar is now a podcast!?Subscribe and listen to the podcast now?where David Morrey and I dissect what’s really happening in the world of regulation. I also host ongoing episodes with Irina Velkova on the latest developments with industry experts.

The UK regulatory handbook 2022 is an indispensable guide to the regulatory landscape for financial services. You can now download the handbook for 2022?here.