Press releases

"Twin peaks" model for FSA - Hector Sants, chief executive of the FSA, gave an update on regulatory reform in a speech to the British Bankers Association on 6 February 2012, announcing the introduction of a “twin peaks” model operating within the FSA from 2 April 2012.

This will mean that banks, building societies, insurer and major investment firms will have two groups of supervisors, one that will focus on prudential issues and one focusing on conduct. All other firms will be solely supervised by the conduct supervisors.

He explained that the changes within the FSA in April would go as far as possible, to ensure that the changeover to the new regulatory structure in early 2013 would be seamless.

In the new model, supervisors will make their own, separate set of regulatory judgements against different objectives. “Independent but coordinated regulation” will be designed to allow internal coordination between conduct and prudential supervisors, but with supervisors acting separately when engaging with firms. The aim will be to only collect the data once from firms and to maximise the exchange of information between supervisors. 

Hector Sants said that the move to twin peaks is an opportunity to drive home and embed the forward looking, judgement based, proactive approach and to accelerate the move away from the old reactive style regulation. He said that the most important change would be the opportunity to accelerate the process of behavioural change and that firms would need to change the way they thought about regulation.

For further information please contact Jane Stoakes.