The Financial Services Authority (FSA) was ineffective in its role as overseer of the financial services sector because it failed to deliver a good balance of 'prudential' and 'conduct' regulation, according to the chief executive of the Prudential Regulation Authority (PRA).
Andrew Bailey, deputy governor and chief executive of the PRA, told attendees of the Chartered Banker Dinner in Edinburgh last night the FSA had been "ineffective" in its management of these roles. 'Prudential' management of financial services looks at the safety and soundness of institutions with a focus on risk, capital and liquidity, while 'conduct' focuses on how consumers are impacted by the actions of financial institutions. The new PRA is focused on the former, while the Financial Conduct Authority (FCA) looks at the latter. Both were set up on 1 April. Bailey said: "I think...
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