They failed to plan for the worse still less did they see it coming and

They failed to plan for the worse, still less did they see it coming, and they allowed Equitable to carry on advertising for customers even after the House of Lords case went against the society.Sir Howard has already moved to address these faults, but however clever he is, however much he attempts to regulate the risk of failure out of the system, something will always get through and eventually he’ll be caught out. It’s an unhealthy habit we have in Britain of heaping the blame on to regulators when things go wrong, as if they should always be there to look after us. Sir Howard positively extols the virtues of a light regulatory touch, and everything the FSA does is these days subjected to a vigorous cost benefit analysis. But the FSA also has much to learn on when to take control of a situation and find solutions. Let’s hope the next big failure finds the FSA better prepared.j.warner independent.co.uk. The possibility that Equitable Life will sue certain former directors was increasing yesterday after new evidence, showing that the society tried to resist regulators’ demands, emerged in the Financial Services Authority report on the stricken mutual. The possibility that Equitable Life will sue certain former directors was increasing yesterday after new evidence, showing that the society tried to resist regulators’ demands, emerged in the Financial Services Authority report on the stricken mutual.
The FSA may still find itself a target for legal action by Equitable, which has engaged Herbert Smith to investigate whether there is a potential case of negligence by former directors and managers, advisers and regulators – which included the FSA and before it the Treasury.But those close to the situation agree that a strong theme to emerge from scrutiny of Equitable’s demise was its own reluctance to hand over information about its financial strength and its objections to reserving requirements placed upon it.Among these details in the FSA’s report is the revelation that Equitable tried to by-pass the regulator in May 1999 by writing to the then economic secretary to the Treasury, Patricia Hewitt.

The letter asked her to overrule the FSA’s requirement that Equitable should dramatically increase its reserves to cover potential liabilities arising from guaranteed annuity rate (GAR) contracts.This letter came after the society had threatened to take the regulator to judicial review over the FSA’s insistence at the end of 1998 that Equitable raise reserves to £1.5bn to cover 100 per cent of GAR liabilities.The FSA’s report stresses that the society was fundamentally weakened when GAR contracts were first written, 40 years before the events of the last three years.Yet Equitable’s current board is understood to be increasingly hawkish about pursuing legal action and may well decide that former executives did not do enough to try to salvage the situation since 1998.Equitable’s old board, which included Alan Nash, Chris Headdon and John Sclater, resigned when the society was forced to close to new business last December. They were replaced by a new team headed by Vanni Treves as chairman and Charles Thomson as chief executive. Mr Treves said: “We were holding back on looking at the regulatory responsibility until the publication of this report, which contains helpful leads which our lawyers will now examine.”Herbert Smith will receive a report on the actions of Ernst &Young, Equitable’s former auditors, in the next few weeks, but is not nearing completion of its review of the case.Ruth Kelly, the present economic secretary to the Treasury, agreed with the lessons the FSA identified for the future in the report. But she added that culpability for Equitable’s demise would not be known until the completion of the investigation by Lord Penrose, which would look “in detail at the actions of the society and all other key players”.. Lord Ashdown was the leader of the Liberal Democrats from 1988-1999. He was a Captain in the Royal Marines, and a diplomat in the Foreign Office, before becoming the MP for Yeovil in 1983. The book and audiobook of The Ashdown Diaries Vol II are out now.Parents in a paddy: Call me Paddy I’m much more of a Paddy than a Jeremy [his real name].

I had a broad Irish accent when I went to a new school at the age of 11, so I was called “Paddy”; it slightly irked my parents.
I was born in New Delhi, and my earliest memory is of the family coming home in 1947, at the time of the Partition. I could sense the fear of the adults when we approached a station covered with dismembered bodies. There was a smell of decomposing flesh, which I experienced later when fighting a silly little war in Borneo. Cupboard love: We then lived in Donaghadee, Northern Ireland, about 10 miles from Belfast, and I walked to primary school along the edge of the shore.