Will we ever find a suitable regulatory system for the UK?
As the government issues yet another revamp of the UK regulatory system for financial markets there are serious concerns that the government's strategy is more short-term than long-term. By creating increased friction between the Bank of England and the Financial Services Authority (FSA), as well as bringing the Treasury in to oversee the system, there are great fears of turf wars within the regulatory framework of the UK.
It was only early this year that the UK government gave the Bank of England increased powers to oversee regulation of the financial markets yet today we see the FSA introduced as an equal partner. The fact that the Treasury will also oversee various elements of the financial market, and the economy as a whole, further reduces the power and authority which the Bank of England has held for hundreds of years and puts the whole regulatory framework at risk.
Politicians and regulation of the financial markets are two elements which have never gone hand in hand in the past with too much political and party pressure placed upon the various governments of years gone by. The move towards an independent Bank of England was heralded by many as the dawn of a new era although unfortunately the darkness seems to be approaching fast.
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