Recommendation 120

We received evidence that an overdependence on inflexible supervisory processes increases the burden on firms and reduces the agility of the regulators. Witnesses suggested that adherence to rigid supervisory processes increases the information requests put to firms without necessarily addressing the key risks they face. Christopher J. Lay noted that whilst the capabilities of the supervisors with whom Marsh McLennan UK interacts are strong, 193 staff are bound by rigid processes that have limited supervisory utility: “… by the time it comes to our supervision team its hands are, in a sense, tied, because this is what it has been given to execute. We often find that we are answering questions because they need to be answered, but the outcome that we should be trying to address is a different issue.” 194