Turner Review - not the frightening document many anticipated

If you are writing on today’s Turner Review from the FSA please consider the following comment from Fiona Raistrick, Head of the Financial Services Regulatory Practice, BDO.

Fiona Raistrick, Head of the Financial Services Regulatory Practice, at BDO says: “Today’s Turner Review from the FSA will not be the frightening paper that many thought it would be.  Whilst Lord Turner has said ‘the changes recommended are profound, and the banking system of the future will be different from that of the last decade’ in fact, the Review is actually a considered paper which collates the material already spread across a number of FSA consultation papers, EU Reports and the de Larosiere report – many of which are already in the process of being implemented.”

“The Turner Review identified the three causes of the financial crisis – macro economic imbalances, financial innovation of little social value and important deficiencies in key bank capital and liquidity regulations.  Many expected that as a result of these findings (and to ensure a similar crisis doesn’t happen again), that the level of regulation would increase dramatically, however, this does not appear to be the case – a point that is likely to be appreciated by the City,” she continues. 

“In reality, much of today’s material has already been drip feed to the financial services sector over the past 6 – 12 months, so the majority of the content should come as little surprise to those operating in the City,” continued Raistrick.

“However, one section that was new is the suggestion of product regulation for the retail and wholesale sectors.  The Review questions whether retail financial services firms should have stricter criteria placed on them over lending, and outlines future restrictions over innovation of product development within wholesale companies,” she continues.

“One point that is likely to be welcomed by many, is the fact that the final implementation deadlines are all towards the back end of 2009 or in 2010, giving financial services firms reasonable time to ensure they meet the regulatory requirements,” concludes Raistrick.

ENDS

For more information, please contact Dee Crooks at BDO on 020 7893 2761 / 07815 172 051 or email dee.crooks@bdo.co.uk

Notes to editors:

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BDO LLP and BDO - Belfast are both authorised and regulated by the Financial Services Authority to conduct investment business.

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