The FSA classifies these tools under four headings:
diagnostic: designed to identify, assess and measure risks;
monitoring: to track the development of identified risks, wherever these arise;
preventative: to limit or reduce identified risks and so prevent them crystallising or increasing; and
remedial: to respond to risks when they have crystallised.
Certain of these tools, for example the use of public statements to deliver messages to firms or consumers of financial services, do not involve the FSA in direct oversight of the business of firms. Other tools do involve a direct relationship with firms. The FSA also has powers to act on its own initiative to impose individual requirements on a firm (see SUP 7).
liaison with other agencies or regulators;
meetings with management and other representatives of a firm;
reviews and analysis of periodic returns and notifications;
reviews of past business;
use of auditors;
use of skilled persons.