It adds a business with £22m of profits to Express’s core operations, which made a loss last year.For Express shareholders the immediate benefit is a special dividend of 9.6p a share, the equivalent of 37 per cent of their money back. That makes up for disappointment at not getting a premium for ceding control to the Danes, who will own 51 per cent of the new group, to be named Arla.The one risk is that a competition investigation by Brussels or the UK’s Office of Fair Trading could block the deal, but this looks unlikely Hold.. Callum McCarthy is not the most obvious choice as the next chairman of the Financial Services Authority, if only because he wasn’t widely seen as available. He’s long made clear he’d be hanging up his boots as soon as his present term of office as head of the energy industry regulator, Ofgem, came to a close. He’s been both poacher and gamekeeper, a double act which might seem ideally to suit him to the FSA, where he must be mindful of the dangers of too much regulation as well as too little.Mr McCarthy’s main work while at Ofgem, the introduction of the New Electricity Trading Arrangements, has proved controversial, driving down wholesale prices to the benefit of consumers and industry, but arguably undermining the commercial viability of Britain’s nuclear power industry and perhaps storing up a shortage of capacity for the future.

None the less, it was what the Government wanted, and it has certainly resulted in some dramatically lower electricity prices.There are three big challenges he faces when he gets to the FSA. One is to roll back on the ever increasing weight and cost of compliance with financial regulation. Most financial services companies still think on balance that the creation of the FSA was “a good thing”, but there is growing concern, particularly among smaller firms, about its cost, and its effect on international competitiveness.A second challenge is the life assurance sector, where the effect of the three-year long bear market in equities is most keenly felt by ordinary people through their pension and endowment policies. The life sector is a classic example of what Sir Howard Davies, the present chairman of the Financial Services Authority, called in a speech to the Securities Institute yesterday “the sledgehammer” approach to regulation.In the last great bear market of the mid-1970s, many insurance companies became insolvent, in the sense that their liabilities began far to outweigh their assets. There were no rules to prevent this from happening, so in the aftermath new solvency requirements were introduced which have remained in place ever since.During the present bear market, these rules have acted in a perverse way, forcing life assurers to sell equities to preserve capital and thereby ensure that liabilities are matched with “safe” assets such as bonds and cash.

In so doing, the rules have poleaxed the main purpose of life assurance as a low risk, “smoothed” investment product with exposure to the upside of equities. They have also helped exaggerate the bear market.Having been forced largely to sell out of equities to preserve capital, the rules make it hard to impossible to know when and how life assurers can buy back in again. Many life companies have closed to new business altogether, while others have had their investment flexibility almost wholly removed. The rules have condemned policyholders to years of poor returns. In his speech yesterday, Sir Howard referred to there being “no market situation so bad that it could not be made a bit worse by an ill-targeted regulatory intervention”.The context was different, but he might just as well have been talking about life assurance. Policyholders were better off during the bear market of the mid-1970s, when regulators turned a blind eye to insolvency of the life sector, than they are now with the solvency rules in place. The FSA is working on a root and branch reform of these rules, but it may be too late.It’s rather the problem with regulation, isn’t it? Invariably it seems to trail events.