Is the Bank of England to up to the job of regulating the financial sector?
As news that George Osborne has handed power for the regulation of the UK financial sector back to the Bank of England filters through there are concerns in some quarters as to whether "the Bank of England is up to the job". It is easy to forget that the Bank of England was effectively demoted back in 1997 due to a "failure" to prevent the previous financial crash in the UK. So why is the Bank of England any different today?
One of the main issues regarding the UK financial sector and regulation of its components was the fact that the regulatory framework brought in many different parties with concerns that communication between the likes of the Bank of England and the FSA was not as fluid as it could have been. Whether this is true or not is open to debate but by handing control back to the Bank of England the UK government is effectively bringing every regulatory body in the UK financial sector under the umbrella of the Bank of England.
However, the task of transferring power back to the Bank of England will not be easy and will take some time to complete.
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