A study of the perception of players within the financial services industry on regulators

Abstract

With this study, the author seeks to examine the perception of players within the financial services industry on the Maltese Financial Services Regulators, specifically the Financial Intelligence Analysis Unit (FIAU), Malta Financial Services Authority (MFSA), the Central bank of Malta (CBM) and Information and the Data Protection Commissioner (IDPC). The author used the Five Factor Model of personality (FFM), which is a hierarchical organisation of personality traits in terms of 5 basic dimensions, which are conscientiousness, agreeableness, neuroticism, openness to experience and extraversion (McCrae & John). Each of these 5 dimensions sums up a range of broad individual differences and includes other specific personality characteristics (Goldberg, 1981). Since the regulator is an individual, the FFM of personality was used. However, the dimensions mentioned in the FFM are all applied to the regulator as an organisation in this thesis.

To fulfill the purposes of this research, semi- structured interviews will be conducted with various Financial Services regulated entities and with the Specified Regulators. The interview consists of statements based on the FFM to which the respondents had to rate their level of agreements. In this case, a five point Likert scale was used from strongly disagree to strongly agree. To further allow the participants to express themselves, an open ended comment box was added to the interview.

The study identified various themes about the regulator including lack of communication between the regulator and regulated entities, staff turnover and too careful in their decisions, which translates into lack of efficiency. However, this study also revealed that the regulator is well known for its flexibility and being able to listen. From the regulators’ interview, it was found what the regulators perceive about themselves and they agreed that communication is not their strong suit and that they are very careful in their decisions. However, regulators also stated that the regulatory burden and costs are increasing a lot on the financial institutions. Hence, the regulators are being perceived as very demanding and non-objective.