ACCA is also concerned that the FSA’s new code is on a shaky footing internationally as major financial markets in the EU and other G20 countries do not appear to share the UK's stance.

Dr Steve Priddy, director of technical policy and research at ACCA, said: “An international approach to regulation is a key element, but there is potential for this code to isolate the UK in global financial markets. This is a lost opportunity during the consultation phase, there was a chance for the FSA to liaise with major financial centres around the world and arrive at some kind of consensus.”€

 

ACCA asserts that a failure in institutions to appreciate and manage the connection between the risks inherent in their business activities and management and remuneration incentives was a key cause of the financial crisis.

 

Remuneration structures and bonuses of banks were characterised by short-term goals which neither supported prudent risk management nor worked in owners' long term interests. ACCA is therefore pleased to see that the FSA makes explicit mention of this issue in their policy statement, saying: “Inappropriate remuneration policies, practices and procedures were a contributory factor rather than a dominant factor behind the market crisis”.