1. The UK government recognised that the previous regulatory framework set up as part of the ‘Big Bang’ institutional reforms was ineffective and proved costly and lacked transparency. See HM Treasury, Financial Services and Markets Bill: A Consultation Document. Part One: Overview of Financial Regulatory Reform, 1998a.
2. The FSA was charged with the responsibility to regulate a very broad range of activities and markets. The Financial Services and Markets Act 2000, Chapter 8, section 1(2), enumerates the FSA’s statutory objectives as promoting ‘market confidence’, ‘public awareness’ and ‘protection of consumers’, and ‘reduction of financial crime’. C. Briault, The Rationale for a Single Financial Regulator, Financial Services Authority Occasional Paper No. 2, 1999, available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=428086.
3. Indeed, then UK Chancellor of the Exchequer, Gordon Brown, stated on 25 September 2006: ‘What we have succeeded in doing is having regulation that not only has a light touch but also that is limited regulation.’
4. Speech by the Economic Secretary to the Treasury, Ed Balls MP, at the FSA Principles-Based Regulation Conference, 23 April 2007, available at: http://www.hm-treasury.gov.uk/speech_est_230407.htm. For further reference, cf., Financial Services Authority, Principles-based regulation: Focusing on the outcomes that matter (April, 2007).
5. For example, firms were given freedom to design their own internal risk management systems as long as they achieved the FSA’s 11 high-level principles.