categorizing consultation respondents August 5, 2010
Posted by Bradley in : consultation , comments closedRespondents to the UK’s new consultation on doing away with the default retirement age (somewhat ironic in a time of high unemployment but not surprising – those who have will get more in the UK in the near future – those who don’t have will just have to hope) must identify themselves as belonging to one of the following categories:
Business representative organisation/trade body; Central government; Charity or social enterprise; Individual; Large business ( over 250 staff); Legal representative; Local government; Medium business (50 to 250 staff); Micro business (up to 9 staff); Small business (10 to 49 staff); Trade union or staff association; Other (please describe)
If I were to respond I’d be torn between replying as an individual or as an other.
transparency in consultation and the privilege of trade association membership May 6, 2010
Posted by Bradley in : consultation , comments closedIf a standard-setter publishes responses to its consultative documents online, as the EU does, and the BIS has, for example on Strengthening the resilience of the banking sector and International framework for liquidity risk measurement, standards and monitoring, why would the writer of a response locate the same document on its own web pages behind its membership wall? The Loan Market Association’s comments are available for all to view on the BIS website, and from the EU Commission’s consultation pages, but its own website states:
The LMA has responded to the European Commission’s consultation on reforming the Capital Requirements Directive (CRD4) and the Bank of International Settlements’ consultative document — ‘Strengthening the resilience of the banking sector ‘.
The LMA welcomes these papers as constructive approaches to macro and micro-prudential risk management and the creation of a more resilient financial sector. To read the LMA’s response, which outlines the issues that the LMA feels should be considered, please logon to the Members’ Area and select Market Information/Regulation/Submission to Regulators.
In fact, the content of the responses is visible in the LMA press release. And in any case, it’s not as if there’s anything very surprising in the LMA’s comments, except perhaps that the comments to both bodies are basically the same, including this paragraph which seems more appropriately directed to a regional body like the Commission than to a global body like the BIS (though given the US attitude to implementation of Basel II perhaps not):
…it is important, given the global nature and interconnectivity of financial markets, that coordination with other regulators, supervisors and governing bodies is undertaken at both the development and implementation stages, so as to ensure clarity of message and avoid any risk of ‘regulatory arbitrage’. Policy should be aligned with other regions, particularly the United States of America.
But if it’s about making the LMA members feel they are getting more for their membership contributions than the lobbying itself, perhaps we should be getting (more) worried about the loan market?
consulting the “general public” February 8, 2010
Posted by Bradley in : consultation , comments closedThe EU’s consultation on information sharing between the EU and the US, which purports to invite responses from stakeholders, including the “general public” doesn’t really seemed geared to generating responses from the public at large. It’s full of jargon and probably only makes sense to people who know quite a lot about the subject matter already (although the consultation page does provide links to relevant documents):
Should the agreement provide for modalities and consequences of “accountability”, e.g. internal and external review procedures? Should the agreement notably provide for a joint review mechanism?.. If there is no possibility to directly access one’s own personal data for justified reasons, should the agreement provide for the possibility of indirect verification through an independent authority responsible for the oversight of the processing in the sending or recipient country?.. Should the modalities for transparency and assistance to data subjects by US and EU data protection supervisory authorities be spelled out in the agreement?
a new reason to worry about credit ratings January 12, 2010
Posted by Bradley in : consultation , comments closedThe UK Treasury, facing a lack of bank lending to UK corporates is trying to figure out how to encourage non-bank lending in a Discussion Paper published today. There’s less non-bank lending to UK corporates than to US corporates, and the paper suggests this may be linked to lower levels of rated corporates in the UK than in the US:
In seeking finance from non-bank channels, in particular the corporate bond market, a public credit rating may increase investor awareness and serve to reduce overall financing costs and risks to investors and businesses. Compared with the US, a significantly smaller proportion of UK companies are rated.
The Discussion Paper asks for data in a number of areas, including reasons why UK corporates don’t seek public credit ratings, and whether requiring more disclosure (corporate transparency) generally or with respect to loan covenants would be a good idea.
uk consumer focused consultations December 3, 2009
Posted by Bradley in : consultation , comments closed
I’m working on a paper on consultation at the moment. The paper really focuses on consultation in the context of transnational standard-setting, but I’m also looking at consultation in the domestic context as well. My initial starting point was that there is much more coherence in the structure and uses of consultation domestically than transnationally (and this may in fact be so in the US under the APA) but variations in consultation practice in the UK seem to shake this up a bit.
This week the UK’s BIS has published two new consultations: one on provision of financial services via post offices and the other on the role and powers of the Consumer Advocate. The post office consultation has a dedicated web page, which has a cute picture of a piggy bank (above), and a short video, and states:
We want to hear about the financial services you would like to see at your local Post Office
The other consultation doesn’t have cute pictures. The consumer advocate consultation document has a white cover, and the other one has a nice picture of a friendly looking post office worker. Both consultation periods opened yesterday, but the consumer advocate consultation runs to March 5th whereas the post office consultation closes on February 24th. The responsible ministers are different: Kevin Brennan for the consumer advocate and Peter Mandelson for the post office. So the variations could be due to the differences in the people involved, or could reflect an assessment that the post office consultation is more salient given the impending election.
developments in the uk credit card consultation November 12, 2009
Posted by Bradley in : consultation , comments closedIn an unusual move, the UK Department of Business, Information and Skills has published a press release relating to the credit card consultation which states:
PricewaterhouseCoopers released a report today on the future of the credit card market.
Commenting on the report, a Department for Business spokesperson said:
“Two weeks ago the Government launched a consultation on new measures which we believe will give consumers who use credit cards a better deal. That consultation is receiving an extraordinarily positive response from the public.
“Consumers are clearly very concerned about the credit card market and we are determined to put the customer back in the driving seat.
“There is a need to proceed carefully but the PricewaterhouseCoopers report fails to reflect the many positive options credit card companies have to reform the current system.
“Consumers would not be impressed if credit card companies used this report to argue against change; they should not hide behind this report.”
The report in question is the latest Precious Plastic Report (the BIS doesn’t make it easy to find – not even citing the report by its title), so it’s not exactly directed at the current consultation, although it is clearly written in a context where the regulation of credit cards is an issue. The report does suggest that regulation (in the US as well as the UK) may have negative impacts on the credit card market. But I think that credit card companies have taken advantage of their customers and of their customers’ vulnerabilities on both sides of the Atlantic in ways that are unethical and some of which ought to be illegal. And if I were writing the latest in a series of reports on the credit card market I’d feel obliged to notice that the political calculus with respect to financial regulation generally and with respect to consumer issues particularly has changed recently. So, isn’t the BIS over-reacting? And will the over-reaction be counter-productive?
uk oecd mnes consultation November 2, 2009
Posted by Bradley in : consultation , comments closedPublished on the same day as the credit card consultation (which generated an immediate response from the UK Cards Association) and by the same government department, the consultation on the terms of reference for an update of the OECD Guidelines for Multinational Enterprises doesn’t seem to merit the same sort of full court press and multi-format consultation documents. There doesn’t seem to be an mp3 version, or a plain English version, even though the document states that the:
consultation is relevant to a cross section of stakeholders, including.. businesses.. business organisations.. trade unions.. non-government organisations.. UK human rights institutions.. trade bodies.. international bodies.. consumer bodies.. law firms and legal bodies .. Parliament, and.. Government organisations
And the document also suggests that really early responses are more likely to be taken into account than later responses:
In line with Government’s code of practice on consultation views are invited within 12 weeks (i.e. by 25 January 2010). However, views received by 30 November 2009 would be particularly valuable in view of the next OECD meeting in early December. This meeting represents a major opportunity for the UK to influence the terms of reference of the update. Comments received after 30 November will still be considered and, where appropriate, put forward in writing. They will still have a chance of influencing the terms of reference but it may be more difficult at this stage to obtain the necessary consensus between adhering countries. To ensure consultation is as effective as possible, a UK NCP’s stakeholder event (9 November 2009) has been arranged, where we will also gather stakeholder views.
The document suggests responses may be submitted by email or by mail (even though there’s an ongoing postal strike). I guess that making it clear that you care about peoples’ responses to this consultation isn’t thought to be very important for the forthcoming election.
uk credit card consultation October 27, 2009
Posted by Bradley in : consultation , comments closedThis consultation, which has been foreshadowed in the press comes in a 3 minute MP3 format, and a plain English version as well as the full document and supporting impact assessments (with respect to equality and cost). And it is available via scribd. The full document has some pictures which make it pretty though don’t help much with the content – there’s an attractive woman biting her lower lip fetchingly (though I think she’s meant to be perplexed or worried) and another attractive woman on the phone looking happy. Apparently men don’t use credit cards, or they don’t have problems with credit cards, as the only pictures of men in the document are small pictures of the men in charge – Lord Mandelson and Kevin Brennan.
The plain English version states:
Other organisations like the European Union and the Office of Fair Trading are already looking at what credit companies should be allowed to do, but we think we can do more.
A bit odd that the Department of Business, Innovation and Skills should be distancing itself from the OFT perhaps, and particularly as the OFT under John Fingleton’s leadership was ahead of the curve in being muscular about retail financial services. And it’s a bit odd to juxtapose the EU and the OFT ,like this – as if they are similar “organisations” in any meaningful way. But I suppose that’s what plain English translation does – in simplifying it tends to ignore real distinctions.
fsa mortgage discussion paper 2 October 19, 2009
Posted by Bradley in : consultation , comments closedThe industry is reacting to the FSA’s DP in the usual ways, and some in the press are characterizing the DP as an over-reaction (although the FT says the proposals are “crude. But .. should …be welcomed”). The British Bankers Association responds to the DP with the rhetoric which was used to justify the relatively unregulated sub-prime lending market before the crisis:
It should be a firm principle of mortgage regulation that higher-risk borrowers such as self-employed people and first-time buyers are not effectively cut out of the market. The issue that faces all of us – lenders, borrowers and regulators – is ensuring the risk of taking out a mortgage can be shared effectively. Any new rules must not serve to create unreasonable obstacles either for lenders or for borrowers.
And the Council of Mortgage Lenders bangs the consumer responsibility drums:
It is important that the principle of consumer responsibility is not lost in such a regulatory environment, as it is a basic tenet upon which transactions of all kinds between firms and consumers rely.
Seems like the beginning of a lively debate.
fsa mortgage discussion paper October 19, 2009
Posted by Bradley in : consultation , comments closedThe FSA published its Mortgage Market Review Discussion Paper today. In keeping with the subject matter the FSA seems to be planning to do more to generate interest in this DP than in some of its other initiatives:
The discussion period ends on 30 January 2010. We intend to run roadshows and set up industry and consumer groups during the discussion period to share views and promote discussion of the main areas for debate.
The issues raised are somewhat complex and described with some complexity (I think the discussion of whether it might be a good idea to adjust prudential rules to protect consumers (the FSA concludes not) requires more than one reading). The FSA does propose to require income verification for all mortgage applicants and to make lenders responsible for verifying affordability. And the discussion paper also raises other questions for consideration, such as whether to prohibit mortgage loans to customers with “low borrowing capacity”. The DP suggests that the FSA wants to do more in future to protect borrowers not just from lenders but also from themselves:
overall, we think that our regulatory strategy needs to change to one that relies less on disclosure as a regulatory tool and looks to influence consumer behaviour in a more sophisticated way.
We signal here a greater realism about the behavioural biases that drive excess borrowing and a willingness to be more interventionist to help protect consumers from themselves (for example, through banning products or prohibiting sales to those consumers exhibiting multiple high-risk characteristics or limiting the amount of equity that can be withdrawn)…
We have also considered how financial capability initiatives may help (for example, by re-educating consumers away from the idea that renting is bad and home ownership good, and away from seeing property as an investment).
But if the roadshows generate consumer interest and consumers say they don’t want to be nannied, what does the FSA do then?