Estudio, diseño e implementación de un sistema integral de transporte

The regulatory participants from the Financial Services Authority interacted with the participants from the banking sector in a way that focused on rules and an orientation that suggested they wanted to control the behaviour of the banking participants. They remained quiet and did not contribute to discussions on topics such as values and ethics that took place but dominated the discussion about the regulatory ringfence, interrupting the flow of the conversation and reading from pieces of paper that they had prepared in advance of the meetings. This section will examine how the FSA used the management of knowledge flows in two different ways to establish the basis for trust between their organisation and the banks and to attempt to build trust in the regulatory environment.

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7. Placing paper between the regulator and the banks to control

The following episode from a focus group involving one of the regulatory participants highlights the rules-based orientation that the regulator took to their interactions in the focus groups and their desire to control the actions of the banks more effectively. Standing up to address the room and reading from typed notes on a sheet of A4 paper one of the regulatory participants commented:

There will be new information handed out about Basel II in the following month, which, which we will develop. Requirements will be outlined in a supervisory statement, that we will send out

The act of reading from a sheet of paper about rules and regulations in a group meeting showed that the focus for the regulator was on what the rules were, that they needed to be clearly understood by the banking participants and that they believed their role as the regulator was to enforce the rules through a ‘supervisory statement’. The participant had written down what they wished to say and stuck to their script. They explain that the requirements will be outlined in a ‘supervisory statement’ that

they will develop and they will send out. The regulatory participant leaves no opportunity here for the banking participants in the focus group to influence the content of the statement and the banking participants are simply told ‘requirements will be outlined in a supervisory statement, that we will send out’ asserting control not only over the regulation, but also the timeline in which the regulation is developed. This action contrasted entirely with informal and more general discussion of the focus groups up until this point and the politicians’ approach to the meetings that has been discussed in the previous section. The fact the regulator stood up to read from the piece of paper indicated that he intended his statement to have a dramatic effect.

At the beginning of the each of the focus groups participants introduced themselves briefly. This, I expected would mean that the representative would say they were attending the focus group in place of their colleague. On both occasions, there was no explanation given for why the colleague was not there, nor did the participant seem to think this could be an issue for the group. They just introduced themselves and made no reference to the fact the name place card they had picked up as they came in the room and put in front of themselves had their colleague’s name on it. However, the way they seemed entirely comfortable with the fact they were not the person whose name was written on the card suggested that this was a regular

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occurrence for them when they represented their organisation – it was as if they thought that the other participants should expect anyone from their organisation might turn up and that a name was just a place holder for the organisation at the focus group meetings.

Figure (21): Reproduction of the front cover of the document placed on the table by the regulatory participant in focus group two

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Although all three examples here of the regulators’ behaviour appear adversarial, this third behaviour provided insight as to why the individual representatives behaved in the manner they did in the first two examples. They saw their contribution to the focus group meetings as purely presenting their organisation’s perspective (much like the organisational narratives the bankers used in the TSC meetings). Therefore their responses would remain the same whoever was in the room as they were organisational statements, in fact precisely because they were not who it said on the name card only further consolidated the impression that they were there simply present in the bureaucratic function to deliver information or convey messages on behalf of the organisation and therefore it was the message they conveyed to the banking participants in the focus groups that was important to the regulatory participants not the individual relationships with those around the table.

Figure (22): FSA website December 23 2011 (From National Archives)

http://webarchive.nationalarchives.gov.uk/20111222123220/http://www.fsa.gov.uk/

The regulatory participants’ focus on rules and punitive action, and the way they delivered their message “by the book”, was therefore defined by the way they viewed themselves in the focus group meetings as functionaries of their organisation. An organisation that they believed existed to ‘police the activities of the banks’ as one of the regulatory participants suggested in a private interview. The participant

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however is again reflecting an organisational view here not their own. For example, the description of the FSA’s role on their own website and emphasised that the organisation was mandated to use a ‘wide range of rule-making, investigatory and enforcement powers’. The tone of the statement about their regulatory approach is shown in figure twenty-two in an archived copy of the FSA website from December 23 2011, which reflects the type of organisation that the FSA believed it was mandated to be.

What we see in the in the regulator’s orientation towards the UK high street banks as they discuss the ICB’s recommendations is a desire for further clarification of the rules that both reflects their understanding of what their organisation was mandated to do as a result of the statutory powers granted in 2001 by the Financial Services and Markets Act 2000 (FSMA) and their desire to place distance between the banks and the regulator. Placing paper between themselves and the banking participants either as statements on a website, a 492-page document, the wrong name on a place name card or a piece of A4 paper made it clear how they wished to conduct their relationship with the banking participants in the post-2008 environment that the ICB report discussed. It was about clarity on paper with rules not personal relationships. Given the FSA’s situation in the proceeding discussion clarity about what role the FSA played was of course of significant import.

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CHAPTER SIX: TRUST-BUILDING ATTEMPTS BETWEEN