Newsletter Feb 2007: FSA warns of increasing potential risks for firms

LONDON – The Financial Services Authority (FSA), Britain’s regulatory watchdog is warning banks and other financial firms that the range and magnitude of the risks they face are growing. It thinks there is an increasing risk that the operating environment could become more demanding for firms and consumers over the next 18 months. “While the risks to financial stability are relatively low at present, if economic conditions were to deteriorate rapidly and significantly, financial stability could be tested,” the FSA says in the 2007 edition of its annual Financial Risk Outlook (FSO), published at the end of January.