Surprise surprise, King endorses regulatory shakeup
As Mervyn King attempts to build a regulatory empire the like of which we have not seen in the UK for many years he today endorsed the UK government's decision to strip the FSA of the majority of its powers and pass them back to the Bank of England. Despite the fact that the Bank of England will now be in charge of regulating individual banks, overseeing the regulatory system for the financial arena and also in control of UK base rates, the Governor of the Bank of England still rejects accusations of empire building.
It seems that the UK regulatory system undergoes enormous changes every decade or so in an attempt to tackle new issues and new problems. However, the rumoured £50 million cost of the ongoing shakeup would appear to offer very little value for money on the surface, when taking into consideration the successful convictions gained by the FSA over the last few months. It will be interesting to see how the Bank of England reacts to this transfer of power and indeed whether there is any improvement in the regulatory environment in the UK and conviction numbers.
There are challenges ahead for the UK government and the Bank of England although unfortunately it looks as though the FSA is about to fall by the wayside.
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