George Osbourne and the Conservatives “White Paper” on City regulation spells the end of the Financial Services Authority.
The Chancellor of the Exchequer confirmed at the Mansion House speech that the Bank of England will assume the role of the key regulator of the UK’s financial sector. The coalition government intends to reform the financial services sector following the financial crisis, creating a new Consumer Protection and Markets Agency to regulate conduct of firms.
The FSA is to be split up 13 years after it’s creation by Gordon Brown, Mr Osbourne stated “The FSA became a narrow regulator, almost entirely focused on rules-based regulation. No one was controlling levels of debt and when the crunch came no one knew who was in charge.”
The FSA will lose much of its role to a new Consumer Protection and Markets Authority which will be charged with ensuring banks, building societies and insurance companies are operating safely.
The FSA’s work in combating financial crime will be taken over by an Economic Crime Agency while a ew prudential regulator will operate as a subsidiary of the bank of England. Further details await however the intention is to have all of this completed by 2012.
Angela Knight of the British Bankers Association, said the decision to split prudential from conduct regulation “is the way many other countries have gone . . . it seems a coherent plan.”
We are seeing big changes both with spending cuts and the changes to the Financial Services Authority, let us hope the Conservatives have not bitten off more than they can chew.
