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The Financial Services Authority could struggle to operate effectively after the Tories revealed their plans to abolish it, chief executive Hector Sants is warning.
It is already facing difficulties recruiting staff, and at the FSA's annual meeting yesterday, Sants said that the Conservative plan “could be and [already] has” become a problem for the City watchdog.
The FSA's chairman, Lord Turner, also criticised shadow chancellor George Osborne's intention, if the Tories win the next general election, of handing regulation back to the Bank of England and introducing a beefed-up consumer protection body instead of the FSA.
He said: “The effort which the FSA and the Bank of England will devote alongside each other will be far more important to the future soundness of our financial system than any debate about what the future division of responsibility between us should be.”
But Lord Turner also admitted that the regulator's future “is unsettling” during a crucial period for the financial sector, when “vital international decisions” are being made.
Reader views (6)
So the FSA becomes a political football because of the failure of all three institutions (FSA plus HM Treasury and Bank of England) which failed to stop things getting out of hand in financial services. Matters which need to be dealt with will likely always fall between stools regardless of the number of governmental departments. The arrogance of the civil service is no match for the rampant greed and ambition of people outside of it. Maybe we can do without on of the three institutions even if the Bank of England got robbed legitimately!
- Nick Cotton, West Sussex UK, 24/07/2009 18:27
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The FSA and its Nu Labor management have been rather an embarrassement I would say.
- Jacqueline, Hampstead, London, 24/07/2009 17:59
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The staff who monitor banks at the FSA were the Staff who monitored the Banks when it was done by the BoE. It's rather like sacking train companies how will that change when 99% of the employees of teh new company will be the same as those who were in the old running exactlt the equipment.
Th eTories are purely playing to the gallery on this one. The real problem is that the really clever people no longer work for the regulators in days gone by banks took their senior staffers from the BoE that all stopped inthe 80's when the academics worked oiout they could be rocket scientists and Goldmans and earn millions in bonuses.
Regulators can never win and struggle to keep up at the moment its like trying to chase jenson Button driving his Brawn in a 1972 Mini Clubman.
The accountants who control the banks are so far out of touch with the investment side that all they are bothered about is if the valuation of the products being traded is sufficient. NOt realisng in most cases that the products are being valued by the traders themselves.
The lunatics are still in control of the asylum and no one has learnt their lesson all they know now is if they get it badly wrong the government will bail them out.
How many heads iof investment banking have gone how many heads of rsik management have gone how many heads of audit gone answer very few. As for external audit their reports have more use as emergency bog roll than accurate statements of fact.
- Duncan, Kent, 24/07/2009 17:57
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The FSA was asleep at the wheel, allowing a number of UK banks to be destroyed by external negative deals and lending too freely here. Many FSA staff were not up to the job. How can the FSA protect if you do not understand the complex products?
- Andrew, London, 24/07/2009 16:52
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Operating ineffectively should amount to a tremendous improvement on the previous record.
- Alan, Llandrindod Wells, 24/07/2009 13:19
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Well he would say that, wouldn't he?
- Ted, London, 24/07/2009 10:41
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