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consumers and financial regulation: december 2008 December 2, 2008

Posted by Bradley in : Uncategorized , trackback

As of this morning, David Lipsey no longer chairs the UK’s Financial Services Consumer Panel. His tenure was short – he became Chair in June of this year, and seems to have had different views about the role of the panel from those of other members of the Panel and of the FSA. The FSA’s statement reads:

In addition to the traditional activities of the Consumer Panel, David has proposed a much wider remit, with a role across a wide lobbying agenda supported by greatly increased resources. The members of the Consumer Panel did not, however, share David’s belief that this changed and wider role was appropriate, nor did the FSA believe that the change from the existing role was required.

Lipsey’s resignation letter states:

Over my six months in office, I have sought to promote a significant change of role for the Panel to tackle consumer financial services issues in a broader sense. This has become more urgent in my view as a result of the blow to consumer confidence resulting from the financial crisis.
This approach has not won the support of the FSA or of the panel as a whole. Additionally, the increased resources required to sustain that altered role will not be made available. In those circumstances, the panel requires a change of leadership.

Only a few days before the announcement of his resignation, Lipsey made some critical comments at a FSA conference on its retail distribution review. This development raises some questions about whether it is really possible to have effective representation of consumer interests in a structure where the consumer representation is funded by a regulator which is committed to not frightening regulated firms too badly.

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