New FSA will prioritise bank transparency

THE FINANCIAL Services Authority (FSA) and Bank of England will today hold a conference for bankers laying out the approach that the FSA’s successor, the Prudential Regulation Authority (PRA), will take towards financial institutions.

The conference comes as FSA chief and incoming PRA head Hector Sants said that improving banks’ transparency will be a priority for the new regulator. In an interview with the FT, he said: “In recent years there has been a shift into more market opacity and a reduction in investor confidence. We are trying to redress that balance.”

That will involve forcing financial institutions to disclose more, although Sants did not specify what kind of information. “We want to improve the ability of market discipline to incentivise management to act responsibly.”

The mandate for greater transparency will extend to the PRA, Sants suggested, which would publish reports into failed banks along the lines of the FSA’s report on RBS, which is yet to be published.

He will speak alongside Andrew Bailey, who will be deputy CEO of the PRA, and BoE deputy governor Paul Tucker at a conference in Westminster today.