Robert Finney on CNBC discussing increased financial regulation

17 June 2009

When asked on CNBC whether he thought Europe was missing the point regarding financial regulation as compared to the US, who were focussing on the real issues, ie capital in banks, securitisation, and the regulation of securitisation, and the assertion that hedge funds did not lead to the financial crisis, Robert Finney agreed and said: "European authorities are trying to deal with all aspects of financial regulation and plug gaps that weren't there. The US will re-regulate hedge funds and introduce hedge fund registration as agreed at G20 in April but won't go nearly as far as Europe.

When asked whether the requirement for financial institutions to retain a 5% credit risk of loans securitised would remove some of the risk, Robert replied: "I'm not sure the 5% law will overcome the incentives banks have to earn fees from securitisation, that 5% limit has already been introduced in Europe and we have to see how that works. Securitisation has been targeted as one of the major factors behind the credit crisis but we need securitisation to get the credit markets going again. When asked whether he was optimistic that the right set of rules had been introduced for the financial markets, Robert replied: "No, there is too much of a temptation to introduce too much regulation and miss the key issues. I'm also sceptical about the effectiveness of pan European supervision, there is a temptation to be seen to be doing something. The FSA and the City of London used to lead European financial regulation just as we led in the financial markets but we have lost credibility and have yet to regain it."

To watch Robert on CNBC please click here.