Principles-based regulation is key to innovation and competition, says FSA chief executive
Principles provide efficient and effective regulation, making prescribed rules obsolete, according to John Tiner.
Complex and prescribed rules fail to provide the desired outcome of a safe financial system, reduce innovation and cost more money for firms, said John Tiner, the chief executive of the Financial Services Authority (FSA) in the UK.
While many financial institutions may prefer prescriptive regulation in the short term, Tiner said that principles-based regulation provides a more flexible, and therefore cheaper, set of rules.
Citing the Treating Customers Fairly (TCF) initiative as an example
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