The Governor discusses the philosophy underlying the measures being taken to reform the regulatory system in the United Kingdom and their role in maintaining the position of London as an open but well-regulated financial centre.
The two major pieces of legislation now in prospect-the Financial Services Bill already before Parliament and amendments to the 1979 Banking Act-have a number of common themes which are as important as their more obvious differences. In particular, central to each is the capacity to adjust to future changes and the flexibility to take account of the diversity of business: and the weight given to practitioner expertise and practitioner advice is an important element in achieving this. The Governor argues that regulation that is both flexible and thorough should be more effective in preventing malpractice as well as providing scope for innovation and market development, but emphasises also the need for an effective system for the detection and prosecution of fraud. Finally, he goes on to argue that the few highly publicised failures need to be set in their proper perspective, against the City's success in meeting the test of providing the best service to customers.
The UK approach to financial regulation - Governors speech