User:Penbat/light touch regulation
Light touch regulation was a regulatory approach to financial institutions in particular by the British government in the 1990s and 2000s. It is in contrast to "heavy touch regulation" or "medium touch regulation".
The City of London's light-touch regulation attracted a massive outflow of capital from New York.[1]
Failed external regulation mechanisms, due either to excessive complicity between regulators, governments and large financial institutions (Iceland, Ireland); incompetent regulators (Iceland); or insufficient monitoring (the Bank of England’s “light touch” regulation)
Financial Services Authority[edit]
Lord Adair Turner, the then Financial Services Authority (FSA) chairman, faced criticism from the Treasury Select Committee on 25 February 2009, especially over failures to spot or act on reckless lending by banks before the crisis of 2008 occurred. He attributed much of the blame on the politicians at the time for pressuring the FSA into "light touch" regulation.[2]
Beyond the Crash[edit]
Former UK prime minister Gordon Brown has been criticised for not recognising his own culpability during the years leading up to the crises. Gray argues that Brown had largely accepted neoliberal economic thinking, leading to his advocacy of light touch regulation for the City. The Economist's review also notes that while Brown stresses the Market's needs for morals, he doesn't give any practical suggestions on how morality could be encouraged in the financial sector.[3][4]
Office of Fair Trading[edit]
The Office of Fair Trading (OFT) rarely prosecute companies, however, preferring a light touch regulation approach. Consumer complaints against companies are not published, but investigation work, undertakings and enforcements are located at.[5]
Independent Television Commission[edit]
On 1 January 1993 new arrangements came into force, and the Independent Television Commission (ITC) began its job of light touch regulation. During this time, the ITC regulated the Channel 3 system as well as Channel 4. It issued licences to new satellite broadcasters and awarded the Channel 5 licence in the late 1990s. It also regulated cable TV.
2008–14 Irish financial crisis[edit]
In 2008 as Ireland entered recession[6] Charlie McCreevy's stewardship has been cited as one of the reasons why the global financial crisis is hitting Ireland especially hard, due to his light touch regulation of the financial system.[7]
See also[edit]
References[edit]
- ^ Irwin Seltzer, 'Britain is not America's economic poodle', The Spectator (30 September 2006), p. 36.
- ^ Pratley, Nils (26 February 2009). "Past failings catch up with FSA". The Guardian. London. Retrieved 2 April 2010.
- ^ John N. Gray (2010-12-29). "Beyond the Crash: Overcoming the First Crisis of Globalisation". New Statesman. Retrieved 2011-01-01.
- ^ "Oh me, oh my: Why Gordon Brown won't be believed by everyone". The Economist. 2010-12-29. Retrieved 2011-01-01.
- ^ U.K. Office of Fair Trading, "Consumer Enforcement", 2013.
- ^ Celtic Tiger dead as recession bites
- ^ "McCreevy's return would only deepen fiscal crisis". The Irish Times. 12 December 2008.
Further reading[edit]
- Books
- Tomasic R Beyond light touch regulation of British banks after the financial crisis 2010
- Academic articles
- D Bilton, H Cayton Finding the right touch: extending the right-touch regulation approach to the accreditation of voluntary registers - British Journal of Guidance & Counselling, Volume 41, Issue 1, 2013
- J Howe, I Landau Light Touch Labour Regulation by State Governments in Australia - Melbourne University Law Review 2007
External links[edit]
- L Elliott Days of soft-touch regulation are over, says FSA chairman The Guardian, 16 October 2008
- A Hill Light-touch regulation: panto villain in a real tragedy - Financial Times, March 20, 2009