Sants says FSA replacement could cut choice
THE Financial Services Authority (FSA) has warned that one of the two bodies set up to replace it will take a “bolder, more intrusive” approach to micro-managing firms’ development and sales of new products.
The Financial Conduct Authority (FCA) will be created next year to take over half of the FSA’s functions. FSA chief executive Hector Sants has admitted that the new approach will risk “reducing choice and raising costs” and that the public would have to determine if the changes are worth it.
He said: “The FCA’s proposed approach moves the calibration of these questions in favour of more intervention but the question which needs to be answered is whether society is happy to accept the resultant costs and potential reduction in individual freedom.”
In a paper, the FSA has elaborated on the additional powers the new body will have, including the ability to refer firms to the Office of Fair Trading and to intervene to ban products or certain business activities that are deemed to be hurting consumers.