The Treasury set to take larger role in UK regulation
It appears that the secret as to why ongoing UK banking regulation changes were postponed this week is out of the bag. Rumours circulate the market suggest that the Bank of England and the Financial Services Authority (FSA) will be stripped of significant power in the regulatory market which will be transferred to the Treasury.
This is a significant U-turn by the UK government and one which is sure to attract significant criticism and debate. There have been suggestions over the last few months that the UK government has been trying to influence the likes of the Bank of England and the FSA but now the chance has arisen to take on more regulation itself the Treasury is set to play a central role in the financial markets going forward. Financial markets have always been wary of governments having direct control of regulations and strategies and there will surely be much unease across the UK.
Whether the UK government will be able to push through these major changes in the regulatory environment remains to be seen but Gordon Brown appears to have set his sights much higher in the medium to longer term although whether a possible Conservative government would reverse these proposed changes remains to be seen.
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