RRP and the FSA in 2012
Just how serious are the FSA regarding the enforcement of Recovery and Resolution planning in the UK? Judging by the FSA’s Business Plan 2012/13, pretty serious. In his overview, Hector Sants, FSA Chief Executive states that:
“…our principal objective is to ensure that major firms whose failure would have significant systemic impact ideally do not fail, but if they do, do so in an orderly way, therefore minimising their impact on the financial system and preventing the need for an injection of taxpayers’ money”.
If this wasn’t clear enough, further down the same page he goes on to say that:
“…the overarching objective of the PRA [Prudential Regulation Authority] is to ensure the safety and soundness of firms and to avoid disorderly failure which has systemic consequences”
And for those who were still in any doubt, not two pages later he notes that:
“…on firm-specific prudential oversight…we will also be particularly focused on ensuring they have effective recovery and resolution plans.”
Anyone hoping that CASS Resolution Packs might escape the FSA’s attention (although after the criticism of CASS by the Supreme Court in the recent Lehman case it is difficult to see how), it looks like you will also be disappointed, with Mr Sants stating that:
“…the protection of client assets will remain a key priority for us…In 2012/13 we will further strengthen our intensive regulatory and supervisory approach for firms holding client money and safe custody assets…”
There is still enough time to properly plan and implement both an RRP and a CASS Resolution Pack. However, with RRP deadlines approaching and FSA policy statements already overdue time will soon start run out for those who aren’t taking this as seriously as the FSA.