Christopher Woolard has spoken on how FCA recognises the value of testing interventions so that regulation works most effectively. He highlighted how what may seem well intentioned and well designed interventions may in fact fail and how FCA has made significant use of behavioural economics to assess what works best. He gave an example of how extensive testing of communications in the cash savings market showed that the impact of disclosure remedies on switching is small and that it needs to consider alternative measures. FCA has learnt that testing should combine diagnosis of problems with the design of remedies, that aim to choose precise outcomes carefully and pay attention to the distribution of outcomes (for example, checking how a remedy has affected a number of sub-sectors within a group).
The speech was made in the context of a new FCA/CMA report on lessons learned in consumer facing remedies.