At FSA’s asset management conference, Hector Sants spoke of the impact of the credit crunch on asset managers. He felt asset managers had fared relatively well in comparison to other market players, and that client money segregation was a major reason for lack of balance sheet impact of the crisis. He stressed the need for:
- proper and appropriate systems and controls for which senior management is responsible;
- caution over any possible headcount reduction because this must not impact on essential functions such as operations, risk and compliance; and
- proper stress testing and appropriate capitalisation.
He looked also at TCF for asset managers, outcome-based regulation and FSA’s role in ensuring quality of markets.