FSA sees sense in liquidity adjustment delay

Thankfully the Financial Services Authority (FSA) has acted in a user-friendly manner in relation to liquidity changes which were first discussed back in October 2009. These changes will eventually see UK financial companies having to put aside more funding to back their operations at a time when business, while recovering, is nowhere near the levels seen in years gone by.

There were fears that a forced introduction of the new liquidity levels would see many UK financial outfits struggling to survive and indeed many would have gone under, but thankfully this has been delayed. The FSA will now release a further update in the first quarter of 2010 although it is unclear at this moment in time when these new liquidity regulations might be brought in.

It is refreshing to see the FSA taking a pragmatic approach to the problem of liquidity in the financial arena at a time when the UK financial sector has been painted as the devil in disguise by many in the political and media arenas. As we have mentioned on numerous occasions, the UK financial sector has been and continues to be the engine room of the UK economy and without a fully functional and competitive financial arena the UK economy would struggle to pull clear of the recession.