UK investor fears seem overdone, regulator says

But UK investor fears nevertheless seem overdone, Financial Services Authority (FSA) chairman Howard Davies told the FSA’s annual meeting in London today. The FSA is the UK’s principal financial market watchdog.

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 or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here