FSA’s Turner ends insurance regulation fears
ADAIR Turner, head of City regulator the Financial Services Authority (FSA), reassured the insurance sector yesterday, saying there was no need for a rules “revolution” in the sector equivalent to the one banks are facing.
He told the Association of British Insurers’ biennial conference that liquidity risks – which caused the banking collapse – are less important for insurers. The sector has voiced fears it may be lumped in with banks when it comes to new regulation.
In his first speech to the insurance sector as FSA boss Turner said: “It’s nice to talk to a sector of the financial industry which has not been responsible for destroying any chance of weekend relaxation”.
He accused the regulator of having attempted “supervision on the cheap” before he took charge and repeated threats of a permanent end to “light touch” regulation.
His speech followed an address by Paul Tucker, deputy governor of the Bank of England, who instructed banks to lend more, saying it was “in the best interests of the banks themselves”.
Tucker added that there were early signs that quantitative easing was working but warned that medium-term economic risks remain.