Government to introduce new financial regulations
The UK government will this week set out a raft of changes to the UK regulatory system which will see much of the current power handed back to the Bank of England amid concerns that the FSA (Financial Services Authority) is about to be disbanded. While it would appear almost certain that the FSA will be closed down or at the very least certain powers transferred to a new financial body, there are concerns that the current regulatory framework could be compromised. So why is the UK government handing power back to the Bank of England?
The FSA was originally introduced by Gordon Brown to reduce the power of the Bank of England, which has historically been the major player in the UK financial regulatory sector. However, there is no doubt that the performance of the FSA has improved dramatically over the last few months and indeed there were calls from many parties in the financial arena to maintain the FSA. Unfortunately for the FSA it looks as though these calls have been ignored and over the next 12 to 18 months the FSA will be disbanded and its power transferred to a new body.
It looks as though Mervyn King will become kingmaker in the UK after the current bout of regulatory changes have been pushed through.
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