Business | Markets

James Moore: Kermit makes financial regulators look like Muppets

 
James Moore
7 April 2015

Fancy chancing your arm at spread betting?

No problem. All you need is a cool trading handle and you’re away. At least according to the boss of City Index’s new American owner.

If Glenn Stevens is right and lax checks and balances have allowed Kermit the Frog and a certain Disney character to trade without any meaningful checks, could the real Mickey Mouse be at the Financial Conduct Authority?

Hold your Champion the Wonder Horse(s). It’s the regulators in Cyprus that Stevens is implying are asleep at the wheel.

A string of brokers have made use of the EU’s passporting rules to set up on the Mediterranean island and then enter the UK.

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Gain has an interest in shaking the trees. It’s good for business. But that doesn’t mean he’s not making a valid point. Others have said the same thing privately.

Moreover, it’s not only in spread betting where potential problems might lurk.

Take AgriBank, which lends to farmers and offers savings accounts with tempting rates. It was set up in Malta, another small island with a big financial sector. So if Agri hits trouble it will be on Malta’s regulators and compensation schemes that UK savers will have to call.

Now the spread-betting firms regulated in Cyprus have to register with the FCA, but that’s about it.

Mr Stevens would like this to be made harder, but it’s not altogether clear that it legally can be.

That’s the single market for you. Under it, Kermit can have his fun until he croaks.