The FSA has published the text of a speech given by its Chairman, Adair Turner, to the City of London Corporation’s Annual Reception for the City Office.

In his speech Lord Turner refers to the changes to the structure of regulatory and supervisory cooperation in the EU to introduce greater integration and coordination between regulators. Lord Turner argues that the success of these proposals will depend on:

  • The ability of the proposed European Systemic Risk Board to develop good quality risk analysis and the willingness of politicians to take its warnings seriously and to countenance potentially unpopular responses.
  • Achieving a commonly agreed and enforced rule book. There needs to be a balance between political oversight and delegation to technical experts.
  • A robust process of peer review between different regulators that would include resourcing and supervisory processes.

Lord Turner also argued that the structures for cross-border business need to recognise the national interests of the host state. Host states should have the right to receive prudential information about entire groups and should be given powers to restrict the activities of branches where prudential weaknesses are not being adequately addressed by the firm or its home supervisor.

View FSA chairman outlines factors for successful European regulation, 6 October 2009