Is George Osborne handing the keys for the UK economy to Mervyn King?

Over the last couple of weeks we have seen mention of various changes on the UK regulatory front all of which appear to point to Mervyn King effectively becoming "kingmaker" in the UK. While there is no doubt that the Conservative party had always intended to pass regulatory control of the UK financial arena to the Bank of England, is George Osborne taking this too far?

In simple terms, after the various changes, the Bank of England will be in charge of regulating individual banks in the UK, regulating the financial arena as a whole, in charge of introducing new regulations and also in charge of UK base rates. This is a very strong portfolio of responsibility with regards to the UK economy and the UK financial arena, handing significant power to Mervyn King.

It is easy to forget that Mervyn King was literally on the brink of being "forced out" by Gordon Brown and many believe he was only saved by the UK recession and the credit crunch. However, after standing his ground for some time, under severe pressure from the Labour Party, Mervyn King is now set to emerge from the shadows as the new face of the UK regulatory setup and the "boss" of the UK financial sector. Whether this is too much for the UK government to giveaway remains to be seen but a lot of trust is now being placed in the hands of Mervyn King.