The Financial Services Authority (FSA) will release a report this week addressing the current issues in the financial market, such as transparency and accounting, and the issues the system may face in the future.

The FSA has also passed the baton of responsibility for the financial crisis onto a "flawed global regulatory architecture".

Speaking at the National Association of Pension Funds' (NAPF) annual Investment Conference in Edinburgh last week, Hector Sants, chief executive at the FSA, rebutted an earlier accusation from Anthony Bolton, president - investments at FIL Investments International, that the FSA was to blame for the financial crisis.

Sants told delegates at the conference that the rules for liquidity and capital are particularly flawed, but cleared hedge funds' name in contributing hugely to the turmoil.

He added that a lack of responsible governance by market participants, in particular bank management themselves, was another key issue. He challenged delegates at the conference to look at the parts of the system which "from your perspective which could have been done a bit better".

In his address, Sants said: "The recent market events support the view that non-executives, in particular, must play a greater role in the oversight of executive management. I think the same can be said of institutional investors."

Perhaps in support of the soon to be released report, Sants added: "On business strategy, I highlight the use because many of the failure in the last 18 months can be traced back to poor strategies and business models."

- Pensions Age March 2009

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