Gavin Hinks

In response to the Oxera consultation, the ABI demands that the biggest firms should shed clients if they amass excessive market share.

All eyes on PwC then, because the firm audits just under 50% of the FTSE 100.

The response to this from the Big Four and others, is if the market chooses the Big Four, they choose the Big Four.

This dedication to free market principles appears to preclude a radical solution like the one the ABI proposes.

But even the London Stock Exchange is regulated. All investors must have a level playing field on which to play out their strategies. No one investor should have less access to information than any other and the rules must be obeyed. Insider dealing remains a serious offence.

So it’s pretty safe to assume that markets do require some form of constraint. An unfettered market cannot provide all solutions.

The question will be whether the FRC decides the problem requires a direct solution, like the ABI’s, or whether it should come at the issue from a more oblique angle, settling the liability issues or starting a campaign of education.

This seems the most likely tack since an interventionist approach won’t attract much support even from the firms who might benefit from it most.

In a recent Insider Business Club webcast, Steven Edmunds a Grant Thornton board member, said a solution had to be ‘market-led’, rather than ‘an artificial regulatory intervention’.

Expect something measured then. There seems to be little appetite for radical change. Voices like his could prove more persuasive than the clamour of objection from the Big Four.

Gavin Hinks is Editor of Accountancy Age