The Financial Services Authority (FSA) is to pay the price of its failings by being broken up.
Addressing bankers at a Mansion House speech, Chancellor of the Exchequer George Osborne confirmed the Bank of England would assume the role of key regulator of UK’s financial sector. The speech set out the Government’s plans to reform financial services following the financial crisis. He put forward plans to move regulation of financial firms to the Bank of England and create a new Consumer Protection and Markets Agency to regulate the conduct of firms.
The FSA role on regulation will be taken over by a new prudential regulator, which will operate as a subsidiary of the Bank of England. It will carry out the prudential regulation of financial firms, including banks, investment banks, building societies and insurance companies.
The FSA’s role in protecting consumers will be taken over by a powerful new Consumer Protection and Markets Authority will regulate the conduct of every authorised financial firm providing services to consumers.
The FSA’s work in combating financial crime will be taken over by an Economic Crime Agency.
Further details are awaited, but all this will be completed by 2012.