FPC member claims banks suffering ‘regulatory fatigue’

Alastair Clark
Alastair Clark
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SOME of Britain’s banks believe they are suffering from “regulatory fatigue”, according to a member of the Bank of England’s Financial Policy Committee (FPC).

Alastair Clark made the comments after speaking to senior members of Yorkshire’s business community during a fact-finding trip to Leeds.

He told the Yorkshire Post: “There’s been a barrage of new regulation, which has been partly domestically generated, with things like Vickers (the Independent Commission on Banking report, chaired by Sir John Vickers), and quite a lot from the European Commission with directives of various kinds.

“Then there are people like the Financial Stability Board internationally who are coming up with all sorts of ideas. It’s a feeling that, almost every week or every month, there’s some new initiative being launched...

“The banks are concerned it makes it difficult for them to plan for the medium to longer term because they are not sure whether something will come along that upends assumptions on which they have been placing their plans.”

Mr Clark is one of 11 members of the Bank’s FPC, which has been established to take action to remove or reduce systemic risks to the UK financial system. After meeting Yorkshire representatives from companies, banks and law firms, Mr Clark said: “One of the themes that came over, was there has been perhaps some confusion or lack of clarity, or maybe even inconsistency, in the messages that they took from the regulatory community generally, and a sense they were being asked to do a number of things.. where they needed more guidance, about how to strike the right balance between different objectives.

“All of which are perfectly fair points to register. They are points which the FPC has been very conscious of. It was useful to have that message reinforced.”

In a recent speech, Mr Clark said that international regulatory initiatives may have inadvertently “front-loaded” the regulatory response to the financial crisis.

He said yesterday: “The suggestion I was making was, that maybe we ran too far, too fast in some aspects of the regulatory agenda without really taking proper account of the collateral consequences for availability of credit and growth.”

Mr Clark was accompanied by Juliette Healey, the Bank’s agent for Yorkshire and the Humber.