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Increased legislation no answer to economic crisis

08 November 2008

More legislation and tighter regulations are not the answer to the credit crunch and the current global financial crisis, according to a leading accountancy expert.

Financial Reporting Council Chief Executive Paul Boyle says he feels that the existing rules are sufficient and that the problems faced across the world are down to organisations failing to abide by current legislation.

What's more, should the Government decide to bring in yet more legislation, it could spell the end for some businesses as credit remains unobtainable or vastly expensive.

In a recent speech to his contemporaries in the accountancy sector, Boyle explained that the rules state that the role of a company's board is to provide entrepreneurial leadership of the company within a framework of prudent and effective controls that enable risk to be assessed and managed.

He went on to say directors of banks and other financial institutions are already reviewing their governance and risk management practices.

The focus should be on whether the existing standards have been observed in practice, he added.

Mr Boyle's call to freeze legislation comes at a time when many small businesses in the UK are struggling to keep up with the seemingly ever-changing regulations.

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