Rethinking investor protection – the case for more regulatory intervention

Posted on May 3, 2011
Filed Under Banking, Financial Institutions and Markets, Event News, Funds Management & Superannuation, Insurance, Media Release | Leave a Comment

Martin Wheatley last night made a strong case for greater regulatory intervention in retail and wholesale financial products in his International Distinguished Lecture to the Australian Centre for Financial Studies.

Martin Wheatley, CEO Securities and Futures Commission, Hong Kong and CEO designate of the UK Financial Conduct Authority (FCA) last night delivered a thoughtful presentation entitled “Rethinking investor protection”.

He stated that “the global financial crisis had precipitated regulatory actions in immediate response to the massive problems that threatened to bring down the global financial systems.” Then Wheatley noted that governments and regulators are now taking “a more considered approach to reforms”.

In the words of Wheatley, soon to be one of the UK’s most powerful regulators, “pivotal to the reform process” will be “enhancing investor protection regimes”.

Wheatley acknowledged that “black letter” rules are not the perfect solution, but he noted that “you can’t legislate ethical behaviour”.

And “to rebuild investor confidence and to tackle the challenges posed by product markets featuring a much broader spectrum of complexity” will require “greater use of judgement, a forward-looking perspective, and pre-emptive actions to stem any potential build-up of risk before significant damage is done”.  
Mr Wheatley concluded that “financial markets are about managing and pricing risk, not its elimination”.

Host of the International Distinguished Lecturer, ACFS Director Prof Deborah Ralston remarked that “in a period of global re-regulation it is important for Australian financial service firms, academics and policy-makers to pay close attention to developments major financial centres like London.” She went on to say that while “the UK’s emerging regulatory model appears to have taken on some of Australia’s better features”, that this was “no reason for complacency.”

About the ACFS-KPMG International Distinguished Lecture Series
The International Distinguished Lecture Series provides thought leadership to the Australian finance and business communities on matters of contemporary global importance.

The Series is sponsored by KPMG and has hosted key international leaders such as:

• Mr Mervyn King, Governor of The Bank of England – “Through the Looking Glass: Reform of the International Institutions.”
• Dr. Robert Joss, Dean of Stanford Business School and former CEO of Westpac Banking Corporation – “Modern Finance and Its Leadership Challenges”
• John Fraser, Chairman and CEO of UBS Global Asset Management – ”A Tumultuous Year or so – Some Observations on the Turmoil in the Financial Markets, Policy Settings and Regulatory Implications”
• Jaime Caruana, General Manager, Bank for International Settlements – “Grappling with Systemic Risk”.

Download media release | Download transcript

Media contact details:
Professor Deborah Ralston
Director, Australian Centre for Financial Studies
(03) 9666 1050
info@australiancentre.com.au

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