Strategy and the Art of Regulation

Sun Tzu's aphorism "let your plans be dark and impenetrable as night" may be a good rule of thumb for military generals but it is rarely considered good advice for regulators. So, I was a little concerned to read that the Financial Conduct Authority has postponed publication of their annual business plan from April to July this year.

Last year, the plan was a little underwhelming but at least it arrived on time, even as cohorts of financial warriors vanished from the City of London and Canary Wharf, leaving a deserted citadel in their wake. Part update, part wish list and part humble pie, the humanity of the enterprise in hand--ie, doing an impossible job in the face of a new and rapidly evolving economic challenge, with scarce resources, against a looming Brexit deadline and in virtual certainty of reputational fallout--was all that really came across. In the event, the 12 months to April this year saw not only the initial credit-related problems associated with the COVID pandemic but a significant loss of liquidity in the share-trading markets and a pivot by the FCA towards the value of promoting and sustaining London as an internationally competitive market. Who saw that coming? Not, apparently, the FCA.

And I say that as someone who not only sympathises but found the very lack of confidence in last year's plan appealing. Who am I to judge?

Nonetheless, the FCA "business plan" is not, in fact, a strategy document. Each year it meanders, waffles, recapitulates ongoing projects and sometimes even pleads a cause, but it rarely sets out a destination or a means to get there, let alone milestones, options under consideration or contingency plans for navigating bumps in the road. That's a shame. It's also a missed opportunity. A business plan is a one-shot chance to move controversy forward in time, into the present, where it can still be controlled. Get buy-in to a business plan and you can only be criticised for abandoning it. Get hammered for your business plan, and at least you know what you're letting yourself in for.

So, this year, I have taken a bite of the apple proffered by Fate in the form of the FCA's deferral and produced a stop-gap regulatory business plan for the UK. It's in a new format, just four presentation slides.

What do you think?

Concise, I hope you would say, and to the point--which is all to the good. Besides, what my regulatory business plan lacks in the way of any anchor to reality or hope of manifestation, it makes up for in pictures and acrostics.

And what is the use of a plan, as Alice might say, "without pictures or conversation"?

*If you or someone you know have been affected by the issues raised in this blogpost, you can contact the FCA by clicking this link and filling out the contact form.