FSA has published a hard-hitting Business Plan for the 2009/10. In their respective forewords:  

  • Lord Turner highlighted:  
    • the fact that the financial crisis is global and has fundamental causes and is not due to deficiencies in regulatory supervision of one institution;  
    • but FSA is recruiting nearly 300 extra staff to intensify supervision of large systemically important firms;  
    • the crisis was also caused by a “wide ranging intellectual failure” in development of business models and products;  
    • the review on banks and bank-like institutions which is due in March and will be accompanied by a long discussion paper suggesting the changes FSA thinks necessary. The paper will focus on capital, liquidity, accounting and institutional coverage of prudential regulation; and  
    • the importance of domestic and international co-operation; and  
  • Hector Sants concentrated on specific priorities for FSA, which include:  
    • a clear commitment to embed fully outcomes-focused regulation in its supervisory processes; 
    • focusing on firms’ funding, business models and strategies to challenge how they manage risk;  
    • strengthening focus on TCF;  
    • increasing enforcement activity and penalties not least as a method of deterrence; and  
    • Improving the quality of its staff and increasing the resource FSA dedicates to direct supervision and the supervisory process.  

The business plan looks at FSA priorities in specific areas, including:  

  • competence of individuals in significant influence functions;  
  • working internationally on robust trading and operational arrangements for OTC derivatives and CDS;  
  • advancing its review of client asset protection;  
  • working at EU level, particularly on UCITS and Solvency II;  
  • a thematic review of anti-bribery and corruption systems and controls; and  
  • an enhanced supervision strategy for small firms.  

Finally, FSA’s budget will increase by 22.6 per cent to £415 million for the next year. Almost all of this relates to staff costs.