The Year 2000 Problem: Helen Liddell, Economic Secretary to the Treasury, says "cost effectiveness is the key"

United Kingdom
On 14th January, at a conference jointly organised by the Law Society's Commerce & Industry Group and Cameron McKenna, Helen Liddell, Economic Secretary to the Treasury, reinforced the Government's commitment that the Financial Services Authority will be cost effective, and that this will not just be an aspiration but a statutory requirement.

Over 150 assembled guests listened to Ms Liddell as she said that "being efficient and economic, and having costs proportionate to its benefits" would be a specific statutory objective of the FSA. The FSA will be required to report on its cost effectiveness to the Treasury, and publish both its fees and accounts at the same time.

In addition, Ms Liddell explained that when the FSA introduces a new rule "it will have to consult both the public and practitioners, and in all cases carry out a statutory cost/benefit analysis". It would be open to regulated firms to challenge the FSA's estimates if they felt that they were unrealistic.

Ms Liddell said that the definition of investment business would be clarified to avoid the need for there to be so many precautionary requests for authorisation.

Ms Liddell explained that the importance which the Government attached to the reform of financial services regulation could be seen from the fact that the Treasury had managed to get advance clearance to draft the Financial Services Reform Bill, which is expected to be published this spring, even though it is not intended that it become law until 1999.

Ms Liddell concluded with a plea to the industry to be more involved in the shaping of the future of financial services regulation in the coming months. She explained that "effective regulation is the key to competitive advantage" and "if you have a technical issue, you should talk to the Treasury about it now. I want to see a free exchange of views in order that you, the industry, can guide us." She ended with the challenge that if those assembled wanted "to see the UK with a world leading regulator, then help us to create it and speak now or forever hold your peace".