Britain’s Financial Services Authority today announced the scope, form and timing of its study of the costs of regulation.
The study will pay particular attention to the impact of costs on small firms and on wholesale firms operating in internationally competitive markets. Its purpose will be to:
- provide robust estimates of the costs to firms of regulation;
- analyze the impact of regulation on firms’ operating costs and how far these costs go over that which firms would spend anyway as part of day-to-day operation; and
- identify the extent to which regulation affects the prices that firms charge, the volumes, quality and variety of products or services that firms offer and firms’ ability to remain innovative and competitive.
“It is a priority for the FSA to develop a deeper understanding of the impact of the costs of regulation on firms, especially smaller firms, and ensure that these costs are justified by the benefits. If the study highlights areas of regulation that are expensive but offer little benefit to firms, consumers or the markets, we will look for ways of easing the burden on firms,” said Kari Hale, Director of Finance, Strategy and Risk at the FSA.
Improving business capability and effectiveness, with a particular focus on small firms which now account for around 97% of the firms regulated, continues to be one of three principal objectives for the FSA.
The completed study will published towards the end of 2005.