Every now and again, it’s necessary to blow your own trumpet. Regular readers will know that I call moments of predictive insight a ‘Martin Peters’ moment. For those who don’t recognise the name, Martin Peters was a great English footballer, often described as being 10 years ahead of his time.
This week, UK financial regulator the Financial Services Authority (FSA) came in for some stick over its mishandling of failed bank Northern Rock. The FSA at least had the courage to commission and then publish what is a pretty scathing review, but what’s going to happen to it? Will it get the sack? According to the FSA, four key failings were apparent in its handling of Northern Rock. These are:
1. A lack of sufficient supervisory engagement with the firm, in particular the failure of the supervisory team to follow up rigorously with the management of the firm on the business model vulnerability arising from changing market conditions. 2. A lack of adequate oversight and review by FSA line management of the quality, intensity and rigour of the firm’s supervision. 3. Inadequate specific resources directly supervising the firm. 4. A lack of intensity by the FSA in ensuring that all available risk information was properly utilised to inform its supervisory actions.
So here comes my trumpet blast. Just over five years ago, I set up a website to have a rant about the things in financial markets that made me angry. The site is now dormant, but part of the rationale behind it was: “Mr Angry is way ahead of the regulators. Incidentally, as most regulators are old codgers, whose only qualification is the right school tie, that shouldn’t come as too much of a shock to anyone. In fact, Mr Angry claims that most regulators can’t actually run a bath, let alone a market.” Yes, I think that was definitely a Martin Peters moment.
