Abstract
In the early 2000s, a new more effective type of financial regulation was discussed and implemented, the so-called principles-based regulation (PBR). PBR is a modern regulation better suited to the financial market’s rapid changes and product development than the classic type of regulation. The regulation means that the undesirable behaviors are listed in general principles, rather than to specify this in detail in advance. In this way flexibility is gained that gives authorizes some freedom to act retrospectively. Today, however, in the aftermaths of the financial crisis, many European countries want tighter regulation of financial markets. This is a documentary study of the PBR objectives and the underlying motives of England’s financial supervisory authority (FSA) in the years 1998-2012. The analysis shows that FSA’s targets are primarily economic rather than moral: increase market efficiency and reduce costs for financial firms and for the FSA, and this agenda seems superior to the consumer protection goal. The objective to “maintain confidence” means that the focus is on protecting the reputation of the financial industry and of the Financial Services authority. These kinds of goals and communication can have the opposite effect of undeservingly eroding the confidence in the new type of Principle Based Regulation.