Sara George, commercial litigation partner, Stephenson Harwood

Opinion: Financial regulator’s transparency policy is double-edged

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  • So what do you suggest? There is no doubt lack of transparency was a major factor in the demise of the two big Scottish banks and, in the name of 'market confidence', the FSA has attempted to conceal very damaging evidence and information. They have been heavily criticised for their reliance on Section 348 which usually translated as “mum's the word.”
    Now the new FCA (or revamped old FSA enforcement team), are to be criticised for attempting to give consumers the transparency they have been asking for? Seems they are dammed if they don't and dammed if they do.
    As someone who has been waiting for the results of an FSA investigation into a major bank that has been going on for two years, I can definitely say the lack of transparency in the present system has resulted in many bank customers (business owners in this case) losing their careers and livelihood – not to mention years of their lives and sometimes their homes. Had details of this particular investigation, which is into allegations of a £1BN fraud, been published by the FSA in a timely manner, many other business owners would have been able to identify 'similar fact' circumstances and could then have supplied valuable evidence to the FSA. And some businesses would have been alerted to a situation they could have avoided.
    Transparency is crucial to reforming the financial sector and I have no doubt at all that many dubious decisions in the sector will be more carefully considered if exposure is a real possibility.

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