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Dealing with interesting times Sir Howard Davies has been at the head of the United Kingdom’s Financial Services Authority (FSA) since its inception in 2000. In its first three years of activity, the FSA has successfully tackled many of the challenging issues which regulators have faced around the world. Davies leaves the FSA in September to head the London School of Economics. WER met with him earlier this year to talk about the FSA’s performance so far.
What more remains to be done in terms of creating the most efficient regulatory authority for the financial sector? Mostly, the building work of the FSA has been done, with the responsibilities of several government agencies being merged into one. There are still some minor projects that we are working on, but the general framework of the FSA is complete. How has the financial sector here weathered the recent storm of shaken consumer confidence and falling markets? I think we have on the whole suffered less than other major financial places of business. We have not had a significant banking crisis, financial markets have taken less of a hit, and no large-scale accounting scandals have appeared. Some of the scandals that were talked about had more to do with poor management or strategic corporate mistakes rather than irregularities in bookkeeping. On the investment banking side, there has also been less of a crisis due to the particular practices in place in this country. This is not to say that there have been no problems at all, and we have had plenty to do in the past few years in many fields. However, we have seen only a shadow of the crises that other countries have seen.
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Howard Davies, chairman of the Financial Services Authority 