FSA role makes HQ less relevant

The provisional appointment on Friday of the UK’s Financial Services Authority as lead regulator of a merged Barclays-ABN Amro has undercut the significance the banks attached to locating their headquarters in Amsterdam.

Barclays agreed to move its head office to the Netherlands in a significant concession to its prospective partner but the FSA has indicated that in supervisory terms that decision is of only secondary importance.

Instead, the UK watchdog and the Dutch central bank reached a joint decision on supervising the group after considering where the board would meet, where its capital and operations would be controlled and where the bulk of its business would lie.

John Tiner, outgoing chief executive of the FSA, told the Financial Times: “In a way it doesn’t matter where the headquarters is. It’s not the relevant factor. It was quite clear once we had the proposed structure [of the merger] that it would put us in the lead as the regulator.”

Barclays had taken the bold step of proposing that the Dutch central bank be its lead regulator, but Mr Tiner was forthright in asserting where decision-making power rested. “The question as to who will be regulator is always a choice for the regulators,” he said.

The Dutch central bank said the decision to appoint the FSA as lead regulator for the merged bank was “pragmatic and sensible”. Key to the decision was the fact that the bank’s board would meet in London, it said.