Entrants should be grilled by the FSA.
Posted on September 23rd 2009
I was quite surprised when I read about the sharp increase in the number of firms looking to start up new banks in the UK. Apparently there are up to 30 such companies who see the UK banking space as the next big thing.
What is putting the vast majority off actually applying for a license is that they see that the FSA is setting much higher standards around capital ratios and liquidity as well as much tougher standards on vetting approved individuals. This surely can’t come as a shock, the World has changed beyond recognition in a financial sense over the last two years and it is absolutely imperative that the regulator reacts to that change.
I am sure that the vast majority of people in the UK who have their life savings in banks or building societies want the regulator to protect them from another bank failure. Any new entrant requiring any form of FSA license has to expect that the FSA is going to spend a lot of time and effort kicking the tyres to make absolutely certain that consumers are protected. I would guess that the 30 potentials will turn into a handful of actuals but consumers will be much more confident about the firms that get a license in this new tougher regulatory environment. After all, it is the regulators job to protect the interests of UK consumers as well as the wider economy.
