Hector Sants, Chief Executive of the FSA is talking tough. There will be no more light touch regulation. Here is a quick excerpt of what he had to say in a speech today:
My central message is that when I took on the CEO role in the summer of 2007 my intention was to radically change the supervision practices of the FSA. I set out to ensure the FSA is seen as a regulator which delivers 'intensive supervision' and 'credible deterrence'.
It sounds great. But how does this commitment to hammer the appalling risk management of the banks sit with New Labour's targets for enforced lending? How can the FSA guarantee that our nationalized banks will not take on excessive risks in a vain attempt to keep Brown and the gang in power?