Professor Niamh Hardiman:

Again, there are people who have greater expertise than I do in financial regulation and the legal arrangements around that, but my understanding is that the powers available to the Financial Regulator would have permitted a more vigorous oversight regime than was actually implemented. There is a report by the Comptroller and Auditor General which states that the Financial Regulator might have asked for more resources but did not do so. I mentioned this in the context of noting that there can be a distinction drawn between formal institutions, rules and laws on the one hand and, on the other hand, the ways they are put into practice, the informal practices that develop and how these things are actually lived out. One can have lots of appropriate strong rules and so on in place but whether they actually have bite in terms of really regulating practices may be another matter. There are all sorts of aspects to how conduct actually goes on that we also want to know about and understand. That is a matter as much of trying to contribute to changing culture, changing expectations, and changing the norms, values and mutual understandings people have about how institutions need to work as it is about designing the institutions in the first place. This comes back to my point about critical engagement and antipathy to groupthink.