Mind Your Own Beeswax

Veronica Wordsworth

Veronica, daughter of The Spectator’s Dot Wordsworth, provides a monthly guide to
the jargon of the financial world

Justin wants to get a dog. He couldn’t have one when he was out day and night earning his living. I’m afraid I replied that if the financial watchdogs had been a bit livelier he might still have his job.

Whether those watchdogs were toothless or just didn’t bark in the night, Hector Sants now wants everyone to be ‘frightened’ of the FSA, where he is chief executive. It’s the FSA’s rapid change of tack that frightens me. In 2007, it published Principles-Based Regulation: Focusing on the Outcomes that Matter. (And look at the outcome.) Evidence-based and risk-based regulation were not enough, it said, like Nurse Cavell pondering patriotism. So it tacked towards ‘outcome-focused rules’. Now Mr Sants has said that ‘principles-based regulation’ should give way to ‘outcomes-focused supervision’.

Anyway, everyone suddenly agrees that things went wrong when regulation was light-touch. How James Thomson (1700-48), the only person in history known to have used light-touch as a verb, would rue this day. Suitably enough (for our former regulatory regime) it comes in a poem called ‘The Castle of Indolence’, and is applied to the art of the 17th century, when ‘Lorrain light-touched with softening hue’.

Light-touch was not so long ago a hooray-word. In 2006, Lord Teverson noted that the FSA’s handbook had ‘approximately 10,000 pages’. It would ‘be a slight exaggeration to call that light-touch’, he said. Looking back, perhaps it was the weight of the book that prevented it being thrown at anyone.

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