FSA announce plans for widespread structural reform
The Financial Services Authority (FSA) has announced plans for a significant restructuring of the authority. We will see the retail and wholesale divisions merged into one business unit, risk identification, risk management and policy formulation also emerged as well as the creation of a new international division which will control contact with overseas regulators.
Many believe this particular announcement has been well timed by the UK government as its ongoing battle with the Bank of England continues to hit the headlines. The authorities seem adamant that the Bank of England will be taken out of the loop of the UK regulatory sector even though many politicians and opposition parties are dead set against the move. However, one beneficiary of this ongoing debate between British political parties is the FSA which has seen a significant increase in its budget and staffing levels.
It will be interesting to see how the restructured FSA operation fares in future as it has attracted significant criticism in the short term regarding its roll in various banking issues. The financial markets, investors, businesses and consumers need to see an instant return on additional taxpayer funding for the FSA otherwise there could be a significant backlash from many quarters.
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