BSA 2012: FCA to operate guilty till proven innocent judgements

Wheatley said that being more judgement-driven would have allowed the regulator to act on issues such as the mis-selling of payment protection insurance much quicker.

When the Financial Services Authority took general insurance under its responsibility, it took around five years to build up evidence to intervene.

Wheatley said: “Under the new model, what I would expect us to do would be to, at a relatively early part of the process say ‘we know enough to know there’s a problem’, not that we know everything. We know enough to know that without strong intervention that problem won’t go away. That’s what I mean by a judgement based approach.

“It’s not the empirical, looking , backwards at a problem, gathering evidence to 100% certainty every time, it’s taking a judgement call and saying that actually we now know enough and knowing enough we can now do something.”

Wheatley added that this product intervention power extended to the FCA would allow it to take a decision based on a judgement that says “there is a problem here and that the product stops and it stops today.”

He said: “The way the rules are written is that we then have an obligation having used that power, which is an intrusive power and I accept that a strong intrusive power has to be used responsibly, the responsibility on us it then to use the period after using the banning order to justify it was correct.”