UK rejects lead regulator calls

LONDON, August 22 (Global Risk Regulator) – Britain’s top financial supervisor today rejected industry calls for so-called lead regulators of big international firms and urged greater co-operation between Europe’s financial regulators.

UK Financial Services Authority (FSA) chairman Callum McCarthy noted that demands from firms for more regulatory convergence have led some industry groups to call for the appointment of "lead regulators" of the largest financial groups.

McCarthy, writing in today’s UK Financial Times newspaper, says that in its most extreme form, "the idea is that all significant regulatory decisions regarding important European groups would be taken by the home (country) supervisor". He notes that the prudential responsibilities of home country banking supervisors already encompass the activities of branches throughout the European Union.

The lead supervision concept would see this home-country principle extended to assessment of the financial soundness of individual subsidiaries as well adequacy of their systems and controls.

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