Is the UK government passing the regulatory buck?
Despite the fact that the Bank of England has been central to the UK regulatory system for hundreds of years it is noticeable that in today's White Paper regarding regulatory changes in the UK there were no new powers for the bank. Instead the UK government has chosen to increase the stature and power of the FSA (Financial Services Authority) amid accusations that the government has more power and more sway over the FSA.
It is no coincidence that the Bank of England has recently been "standing up to" the UK government and is anything but a "yes man". Many people believe this independent approach to the UK financial system and the regulation of markets, something which the Labour government introduced, is the reason why the Bank of England is being overlooked by the Treasury and the Chancellor of the Exchequer.
As we have covered on numerous occasions, the relationship between the "Old Lady of Threadneedle Street" and the UK financial markets is cemented in stone and goes back decades. There is growing speculation that these proposals put forward by the UK government will never actually reach the statute book due to the potentially serious impact upon business and the competitiveness of the London markets.
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