As climb-downs go, this was as grace-ful as you'll see. Britain's Financial Services Authority (FSA) said on July 19th that it would change the way it does business in order to give firms suspected of wrongdoing a better hearing. Sir Callum McCarthy, the FSA'S chairman, accepted all the recommendations of a review commission set up five months ago in response to widespread criticism. He said that the watchdog was determined to reach a point where firms subject to its discipline could say, however grudgingly, that the process had been fair. With these reforms-give or take a few caveats-he will probably achieve his goal. The catalyst for this first serious over-haul of enforcement in the FSA'S seven-year history was an action for endowment-policy mis-selling brought by the regulator against Legal & General (L&G), a big insurer. Where many had muttered, L&G fought back. An independent review tribunal in January halved L&G'S fine, from £1.1m ($1.9m), and criticised the FSA'S procedures. It said that the main problem was the regulator's failure to distinguish adequately between those who investigated a case (its enforcement division) and those who decided on its merits (the quasi-independent Regulatory Decisions Committee, or RDC).
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