| FSA Chairman, Callum McCarthy, has expressed his deep concern of the cost and effect of current regulation saying that the burden represented a "significant hazard" to the financial sector.
In his speech to the FSA's Annual Public Meeting, McCarthy said, "The threat arises from the combination of so many initiatives: the application of Sarbanes-Oxley; the work to prepare for Basel 2; the implementation of the various directives introduced under the Financial Services Action Plan – notably the Prospectus, Market Abuse and Market in Financial Instruments Directives; the introduction of new International Financial Reporting Standards; the FSA's work to introduce long overdue new accounting and reporting standards for life insurance companies".
Elaborating on his concerns, McCarthy cited MiFID as a prime example of the problems presented by new regulation. "It is deeply unsatisfactory that UK financial services firms face major changes, with the associated costs, for an initiative which has been subject to no comprehensive EU cost-benefit analysis to assess the specific contribution it might make to unlocking the prize of a more integrated European capital market. That kind of approach to policy-making cannot be sensible".
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