Focus required as FSA is phased out

28 June 2010

Hindsight is a wonderful thing. If the Bank of England had been in charge of regulating financial services the impact of the global financial crisis would have not been so severe - or so the chancellor reckons.

Personally, I wouldn’t have cared who was in charge as long as they had spotted the storm clouds gathering and prevented the crisis from happening.

So we’re to have a new regulatory set-up in place by 2012, giving the Bank a key role in prudential regulation - although I thought we’d cast prudence out with the last government - and creating a new Consumer Protection Agency.

I hope the regime chancellor George Osborne has in mind will bring greater coordination to the regulatory system. And I hope it will take a close look at the role each part of the financial services community plays and come up with a sensible platform that treats each equitably.

I also hope that during the transition period nobody at the Financial Services Authority or Bank gets so bogged down in the minutiae of overhauling the system that they take their eye off the bigger picture.

There are signs of strain in the financial system again, mainly emanating from overstretched countries in the eurozone. Whoever is in charge can’t allow a second wave of banking disasters.

I’m sure the announcement of the demise of the Financial Services Authority raised a cheer from many in the industry but I’m sitting on the fence for now.

If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat