FSA boss: ‘No more soft touch’

Lord Adair Turner, the head of the Financial Services Authority (FSA) which has recently seen its powers beefed up to deal with the effects of the credit crunch, has warned the City that the days of soft-touch regulation are well and truly over.

Turner admitted that in the past the City had benefitted from the FSA attempting to regulate "on the cheap". He promised that in the future the body would have "more people asking more questions, and getting more information, than we were getting before."

He continued: "There is no doubt the touch will be heavier. We have to make sure it is intelligent and focused on where the risks really are." Turner also recalled how the FSA had in the past been accused of stifling the City with bureaucracy.

"If a year and a half ago, the FSA had wanted higher capital adequacy, more information on liquidity - had said it was worried about the business models at Bradford & Bingley and Northern Rock - and had wanted to ask questions about remuneration, the fact is that we would have been strongly criticised for harming the competitiveness of the City of London," he said.

Turner was talking against the backdrop of fresh volatility in the global money markets. The FTSE 100 closed at 3861, its lowest level since the Gulf War in 2003. The Dow Jones rose by 400 points, after being 400 down at one point, while overnight the Nikkei index in Japan showed a modest gain.