Half of financial services firms think watchdog is too tough
Almost half of Ireland’s financial services companies believe the sector’s watchdog is being too hard on them, it was revealed today.
The industry say the Financial Regulator is too focused on consumer protection over innovation and competitiveness, according to a poll.
The development of new products and services has been hindered by the regulations, it was claimed.
Pressure is particularly felt among the smaller companies, the majority of which found the official overseer lacking in understanding.
The findings came from a Financial Services Consultative Industry Panel (FSCIP) survey of over 1,100 senior executives in the industry.
James Deeny, FSCIP Chairman, said the research provided a comprehensive insight into the perceptions and issues of companies.
“The industry recognises the difficult job that the Financial Regulator performs and the pressure which its resources are under,” he said.
“However, a clear message which has emerged from the survey is that the regulator is not seen as having sufficient understanding of the real business needs and concerns of regulated entities.
“In this regard the Office of the Regulator would clearly benefit from having more direct industry experience within its overall structure,” he said.
He has urged the creation of a new post of Wholesale Director to work alongside the Consumer Director and Prudential Director.
The FSCIP was set up in 2004 to advise the regulator and the survey will be central to its input into the Financial Regulator’s Strategic Plan 2007 – 2009.
Some 67% disagreed with the statement that the Financial Regulator “recognises the impact of regulation on smaller firms and seeks to accommodate them appropriately”.
And 63% disagreed with the statement that the Financial Regulator “shows understanding of smaller firms in the development of regulatory policy and operation”.
However, overall satisfaction was clear with a huge majority (92%) believing that their relationship with the Financial Regulator has either remained the same or improved over the last two years.
There was strong recognition of the openness and informal nature of the watchdog, which is viewed as a significant positive by industry.
However, the research also revealed that 43% of the industry do not feel the regulator fully understands their businesses.
