Should the FSA oversee investment advice to public bodies?
The collapse of the Icelandic banking system has prompted a committee of MPs to suggest that the FSA (Financial Services Authority) should have the power to oversee and regulate investment advice given to public bodies. It is well-known that UK public bodies held around £1 billion of UK taxpayer's money with Icelandic banking institutions at the time of the collapse. While around £100 million has since been returned there is growing concern about the standard of advice given to UK public bodies.
At this point in time the FSA has no powers to intervene in the public sector despite the fact that billions upon billions of pounds of taxpayer's money are invested in all manner of different financial instruments. It would seem sensible to bring public bodies under the remit of the FSA although this could potentially open a can of worms with regards to advice sought and taken in the past.
However, at the end of the day any investment decisions taken by public bodies are in effect covered by the UK taxpayer who will be expected to be bailout various public bodies in the short, medium and longer term. Whether this is a fair system is open to debate because on the surface it looks as though the introduction of new controls and regulations could prove very beneficial to all parties involved.
Share this..
Related stories
UK authorities reject call for charges against Madoff arm
The Serious Fraud office (SFO) has this week confirmed there will be no charges against directors and employees of the Madoff UK arm which was mentioned as a prominent part of the group in an investigation by the US authority. While Bernard Madoff himself is currently serving a term of 150 years in a US prison regarding the alleged $65 billion Ponzi scheme it looks as though his fellow directors w...
Read MoreRegulatory changes will cost UK government £50 million
At a time when the UK authorities are slashing public budgets in almost every department of the government, it has been revealed that the abolishment of the FSA and the transfer of regulatory power back to the Bank of England will cost the UK government £50 million. There will be a mountain of legal work and reorganising for the government to do in a relatively short space of time which is predom...
Read MoreIs the quantitative easing policy flawed?
As we see the first tranche of quantitative easing money flow into the UK debt market there are serious concerns that the quantitative easing policy is fatally flawed. The indications are that very few UK institutions came forward to sell their government securities and other debt instruments leaving the assumption that the vast majority of the £2 billion spent so far has gone to overseas investo...
Read MoreBP announces difficulties with new well cap
Engineers have detected seepage and a possible methane gas leak on the seabed in the region of the Gulf of Mexico oil well which is causing so many problems for the company. This is a hammer blow for BP which had initially thought that the new cap was enough to stop the leak and effectively bring to an end a disastrous period in the company's history. However, engineers are now moving back to the...
Read MoreStuart Rose agrees to 25% pay cut
Stuart Rose, the executive chairman of Marks & Spencer, has agreed to take a 25% pay cut as part of his executive duties will be taken on by new chief executive Marc Borland. There has been speculation as to whether Sir Stuart Rose would have been keen to reduce his pay packet as his role was reduced with an initial indication he was unhappy about being forced down this particular route. However,...
Read More