ABI: Don’t ignore UK’s institutions

THE NEW chairman of the ABI’s investment committee has warned regulators that an over-zealous approach to protecting the interests of retail shareholders in the wake of the financial crisis could come at the expense of institutional investors.

In his first official speech in the role, Aviva Investors chief executive Alain Dromer expressed support for a new regulatory structure with increased emphasis on financial stability and a greater role for the Bank of England.

But he said regulators should guard against the danger of focusing too heavily on the “perceived shortfalls in banking regulation” and skipping over the needs of institutional investors.

“Financial markets, we should always remind ourselves and regulators, allow capital allocation between investors and issuers. Intermediaries are servicing this purpose,” Dromer said.

“There are significant differences between retail and wholesale markets and it is important that the priorities of the Consumer Protection and Markets Authority are not dominated by thinking rooted in consumer protection.”