What is the POINT of Regulation? IT DOESN’T ALWAYS WORK!!!!
Before our politicians scratch each others’ eyes out on Monday, fighting over Royal Commissions and Press Regulation, they should consider what good a similar process did to the Financial Services Industry.
Regulation of any sort never works 100%.
Pre the various Financial Services Acts which spawned the Financial Services Authority, the Financial Services Industry was by no means perfect but is was self-regulated.
There was the occasional mis-selling scandal, life assurance salespeople occasionally confused clients’ money with their own and the standard of technical knowledge was below average. Bankers were boring but well-behaved and Building Societies were firmly rooted in the nineteenth century.
Then suddenly, products became more complicated, less client friendly, building societies wanted to be like banks, banks wanted to be like building societies AND insurance companies AND stockbrokers!! Shiny-new MBAs were hired!
………and oh yes………financial product design became marginally MORE complicated than Rocket Science.
More training, more technical knowledge and REGULATION were needed.
So what did all that regulation achieve – apart from creating a self-perpetuating multi-million pound regulation industry?
Well, since the financial regulator arrived on the scene, we’ve been subjected to many new experiences. For starters, there was the 2008 banking meltdown. Then we had PPI mis-selling by the Retail Banks, followed by LIBOR rigging by the Investment Banks. Then of course we had those VERY naughty Interest Rate Swaps which so many SMEs signed up to. There are still many major issues which will have to be dealt with by the regulators, the hugest one being the continued use of Off-Balance Sheet Accounting by the banks.
Regulation? Code of Conduct? Snooping through Filing Cabinets? Reporting Systems? Yet another Quango?
A fat lot of good they all did in financial services!
A basic Media Code of Conduct and SELF-regulation is the ONLY way forward.
Royal Charter or no Royal Charter, self-regulation of the media or a Regulator supported by law and a Bible full of Rules and Regulations will make absolutely NO difference, either to the conduct of individuals or the behaviour of privately-owned media corporations.
Yes, it is an important issue and Lord Justice Leveson has highlighted ALL the right issues but whichever approach is taken, it will make little difference.
The only thing which is important is that the media is NEVER controlled by the State plus that the legislators learn the lesson of the car-crash that is the regulated financial services industry