UK investor fears seem overdone, regulator says
It is right that regulators look hard at the UK’s regulatory regime to see whether improvements are needed to prevent a fraudulent attempt to inflate corporate earnings for personal gain, the UK’s chief financial regulator said today.
Davies said many investors have been shocked by a series of unpalatable revelations from US companies, in particular.
“Some of the previous comfortable certainties about corporate earnings and the integrity of company accounts have been thrown into question,” Davies said.
The UK cannot afford to be complacent - the prudent assumption must be that similar frauds could happen in Britain, he said.
That is despite UK accounting standards differing from those in the US, with UK accounting approaches often preferable to US ones. There is also a greater degree of independence built into the UK accounting and auditing regime, Davies said. But he added that a paper on options for auditing reform in the UK, to which the FSA is contributing, will be published shortly by the UK Treasury and the Trade and Industry Department.
“But while ‘it’ could happen here, so far it hasn’t,” Davies said. “We do appear to be buffeted by winds from across the Atlantic, rather than by any domestically generated bad weather,” he added
Davies said it was “slightly odd” that the fall in the FTSE 100 index of UK share prices was greater than that of the US Dow Jones index. The Dow has fallen by only 27% from its peak, compared with 40% for the FTSE, he noted.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
FCA presses UK non-banks to put their affairs in order
Greater scrutiny of wind-down plans by regulator could alter capital and liquidity requirements
Industry calls for major rethink of Basel III rules
Isda AGM: Divergence on implementation suggests rules could be flawed, bankers say
Saudi Arabia poised to become clean netting jurisdiction
Isda AGM: Netting regulation awaiting final approvals from regulators
Japanese megabanks shun internal models as FRTB bites
Isda AGM: All in-scope banks opt for standardised approach to market risk; Nomura eyes IMA in 2025
CFTC chair backs easing of G-Sib surcharge in Basel endgame
Isda AGM: Fed’s proposed surcharge changes could hike client clearing cost by 80%
UK investment firms feeling the heat on prudential rules
Signs firms are falling behind FCA’s expectations on wind-down and liquidity risk management
The American way: a stress-test substitute for Basel’s IRRBB?
Bankers divided over new CCAR scenario designed to bridge supervisory gap exposed by SVB failure
Industry warns CFTC against rushing to regulate AI for trading
Vote on workplan pulled amid calls to avoid duplicating rules from other regulatory agencies