Speaking at the FSA’s annual public meeting held this morning, Sants said despite the reorganisation of prudential regulation, “these new organisations [will] carry forward both the philosophy of ‘outcomes based regulation’ but also the necessary mechanism for making the required judgements.”
He stressed that the FSA’s “intensive supervisory approach”, which some refer to as intrusive, will continue into the new organisational framework.
He said: “We will take forward all our major policy initiatives within the new structure. We will not be deflected from delivering much needed policy reforms such as the Retail Distribution Review (RDR).
“We are entering a period of substantial change in the European regulatory environment and it is vitally important that the UK fully engages with these changes.
“We must recognise that going forward, particularly in respect of supervision, the national entities will increasingly become an arm of European policy and thus, effective engagement with the European agencies is absolutely critical.”
Sants added that there would be no return to “light touch regulation” as we move out of the financial crisis. He said: “It is vitally important that regulators stand their ground and continue to be proactive, but this will require that they are supported by government and society as a whole."
