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Text of speech by Clive Briault, Managing Director of Retail Markets, FSA
Reception for First Anniversary of Fair Finance
London 19 September 2006

We were delighted to have been asked by Faisel to speak here this evening. There are a number of reasons why the FSA is happy to have been invited to say a few words.

The first is the importance of addressing financial inclusion, as demonstrated by the presence of so many of you here this evening. I am sure that all of us here recognise that financial exclusion needs to be addressed with the active support of Government, the financial services industry and its regulator.

Indeed, this has already been acknowledged. Many of you will be aware of the recent Treasury Select Committee inquiry and its report due later in the autumn. We look forward to seeing the results of the evidence collected by the Committee from a wide range of interested parties, including consumer and voluntary organisations, the financial services industry, various Government departments and agencies and ourselves.

In our evidence before the Committee we reaffirmed our commitment to playing our part in addressing financial exclusion. What this means in practice can be seen in the progress we are making to promote public understanding of the financial system, particularly in driving forward the UK's National Strategy for Financial Capability. Throughout the development of this work, we and our partners have considered financial inclusion as integral to the Financial Capability Strategy. We are pleased that, as a result of our work, financial capability education, information and advice will be reaching further into UK schools, higher education institutions, organisations that help young, and often excluded, adults; and reaching further into the workplace. We are also developing and promoting a wide range of materials that can be used by many others, including the voluntary organisations that can reach out most effectively to the financially excluded. This work will benefit many consumers and their families, helping them avoid the isolation and stress often brought on by poor financial capability.

In addition, we hope that the regulatory regimes we have developed in areas such as credit unions and Islamic financial products and services have made a positive contribution to financial inclusion.

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Second, we have tried to help the development of Community Development Finance Institutions (CDFIs) such as Fair Finance. Michael Cook and Ramona Taylor at the FSA have been actively involved with Bernie Morgan and colleagues at the Community Development Finance Association (CDFA) in developing a code of practice for this sector as an alternative to more formal FSA regulation. We and others with an interest in the growth of CDFIs are very keen to see a robust and challenging document, which will underpin standards and provide reassurance to those who fund, or invest in, the sector. We pay tribute to the CDFA in taking this initiative.

When he announced the creation of HMT's Financial Inclusion Taskforce, former Economic Secretary Stephen Timms said: "East London is home to some of the world's biggest banks, but too many people in the area can't use their services. We need to do more to enable individuals to take control of their own finances and access the services they need." It is clear that Faisel and colleagues have seized the initiative to help those in East London access the services they need.

Fair Finance was the first CDFI to be registered by us with some basic consumer protection measures built into its rules. And it takes its responsibilities as a community business very seriously. The publication of its disclosure report on lending earlier this year gives us a measure of the valuable input it is making to the community it serves. During the 8 months covered by the report, Fair Finance made over 150 loans totalling more than £250k. That is 150 people outside the scope of mainstream lending who might otherwise have little alternative but to resort to high interest loans from unscrupulous lenders. That is a tremendous achievement for such a young organisation and I look forward with interest to the publication of your next report.

My third and final reason for being so glad to be here is that we at the FSA are wholly committed to supporting those that seek to support our local community. We are keen to impress on all our staff that as a member of the Tower Hamlets community, we – like other employers in Canary Wharf – have responsibilities to discharge and contributions to make. We have our own Community Affairs programme focusing on Education and Regeneration projects in Tower Hamlets and other boroughs bordering Canary Wharf. We are committed to being involved in our community and I am glad to be playing my own part by supporting the work of Fair Finance this evening.

So, congratulations Faisel and to all at Fair Finance for the work you are doing in developing products and services for those who most need them here in East London. I wish you continued success for the future.

Thank you.

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