Uncertainty over the future of the Financial Services Authority (FSA) has led staff members to leave “in droves”, a legal expert has claimed.
Jonathan Davies, a partner at Reynolds Porter Chamberlain LLP (RPC), made the comments following the publication of research by the firm, which showed a 128 per cent increase in the amount of staff leaving the industry regulator.
Findings from a Freedom of Information Act request showed that 121 FSA staff resigned in the second quarter of 2010 when compared with 53 during the same period last year.
Mr Davies said: “The FSA’s staff have been leaving in droves because of uncertainty over the regulator’s future. This kind of exodus cannot have a positive impact on the FSA’s ability to function.
“The reform of the financial services sector is not over and the City faces many challenges including banking reform and the implementation of Solvency II. Until then stability at the regulator is important – the financial services sector and consumers aren’t getting that.”
RPC stated that if staff continue to leave at such a rate, then the decision-making process at the organisation will be slowed and the quality of the decisions could be impacted.
Previous research from the legal firm showed that the average number of weeks it took the FSA to authorise a business to work within the financial services industry went up by almost three-quarters between the first quarter of 2009 and the same period in 2010.
By Jim Ottewill