Everything new, everything the same
This week, we make our first Annual Levy, publish the first edition of Outlook and send out the first of my monthly blogs under the new regulatory regime.
So what’s different?
Some things aren’t different at all, but just the same.
FSCS continues to be the UK’s unified compensation scheme for financial services. We continue to protect the full range of regulated financial services.
We continue to be independent in our decision-making and in the running of our own affairs.
We continue to attach high importance to our obligation to account to the industry for our use of your resources.
So you will find in this month’s Outlook our usual overview of the final levy we have decided to raise for 2013-14 and how it differs from the provisional numbers we set out in our Plan & Budget in February. The good news is that the levy will in fact be £26 million lower than we foresaw earlier in the year.
Of course, this is not necessarily the last word for 2013/14. We do only levy for failures of which we’re aware and for compensation costs which have crystallised. This ensures we don’t take money from the industry ahead of need.
But it’s quite possible that new failures will occur as the year progresses. We shall use future editions of Outlook to alert you to these and to forewarn you of any additional costs that may come our way as a result.
And, of course, we shall also maintain our close contacts with the industry’s trade bodies to keep them in touch with our view of the financial prospects, including our progress in making recoveries from the estates of ailed businesses.
So much this may sound, so familiar.
But some things undoubtedly will change under the regulatory regime.
For one thing, FSCS will now have accountabilities to both the Prudential Regulation Authority (PRA) and to the Financial Conduct Authority (FCA).
I do not myself see this as simply a doubling of oversight, but rather as a very welcome sharpening of the focus.
FSCS will work closely with PRA on developing and perfecting plans for the resolution of banks, building societies, insurance companies and other systemically important firms. These are businesses which must be able to fail safely, but failure - the essential discipline of the free market - can only occur if we can protect ordinary savers and policy holders.
That is why FSCS must be ready to respond to future crises and why we continue to invest in our resilience and capability. We have to be ready to respond to the full range of failures when things go wrong.
Equally, FSCS will work with FCA on its remit to ensure that markets for financial products are competitive and work for consumers.
Protecting consumers is at the heart of what we do. Our role in compensating consumers and in making recoveries gives us important insights into the causes of business failure and consumer detriment.
We shall be sharing those insights with FCA to inform the more proactive approach to regulation which the new Authority is developing.
So, yes, some things stay the same – particularly our commitment to be accountable – but in other respects the new regulatory arrangements will be different and, I think, better.