A recent flurry of articles and commentary, in publications ranging from The Financial Times and other broadsheets to the BBC, has questioned the principles and ethics of contemporary business activity. It is not for The Treasurer to act as arbiter of these debates, even where the tone and style of comments have been so negative. However, there needs to be an element of balance in how business – especially the financing of business – is perceived, managed and regulated. There have clearly been excesses in all manner of business activities. Executive pay and Madoff-style investment scams are among the issues to have particularly excited the media. But can anyone recall the tax authorities suggesting they would not take the extra income taxes paid as a result of such excesses? Nor has the “court of public opinion” previously been invoked in debates over other types of financial abuse, such as the misuse of parliamentary expenses. More importantly, these storms whipped up by the media speak volumes about the low quality of financial education (in the UK especially) and the unwillingness of all those engaged in financial services to try and prevent a race to the bottom. The ACT, through its policy and technical manifesto, believes that open, liquid, transparent and honest markets are in the interests of all companies either involved with them or that use them. It is also important to take account of non-financial corporate clients’ needs, as well as financial service industry convenience. Importantly, the ACT also subscribes to the view that where regulation is to be applied it should be with a bias towards light-touch and principles-based regimes that will lower costs and preserve as much flexibility as possible. The recent suggestion by the FSA that it will move its focus away from principles-based regulation towards outcomes-based rules will need to be watched carefully; although to be fair, recent statements from European regulatory bodies have been sensible and reflective of the value of the financial services industry. The Treasurer magazine will continue to offer informed, lucid and unbiased debate on these matters for readers. We also commit to challenge threats to markets which, in our view, would severely compromise the ability of treasurers to safeguard the health and vitality of their organisations. PETER MATZA HEAD OF PUBLISHING, ACT
