The Home Office and the Treasury appear locked in a tussle over who will take on responsibility for criminal enforcement powers under the new regulatory structure.
Documents leaked to The Times suggest the Home Office is considering moving responsibility for pursuing financial crime to the new National Crime Agency.
The Treasury intends to transfer the FSA’s criminal enforcement powers to the Financial Conduct Authority after delaying plans to create a new Economic Crime Agency.
Due to the under-the-bonnet nature of much financial crime, it is hard to judge how successful the FSA has been in this area.
However, the issue has certainly climbed up the agenda due to the influence of Margaret Cole, in her role of director of enforcement and financial crime, and the regulator has brought forward a number of insider dealing and market abuse cases.
There is a danger that moving enforcement responsibilities to the NCA would dilute the power of those seeking to crackdown on financial crime and see issues such as insider dealing de-prioritised due to a heavier focus on other criminal activities.
A taxpayer-funded NCA may also be given less resources to tackle financial crime. Some in the industry may be happy that this move could lead to lower regulatory costs but it is in no one’s interests for the UK to be seen as a soft touch on financial crime.
AV after effects
The result of this week’s alternative vote referendum is likely to have a profound effect on the future of the coalition Government.
A win for the no camp is likely to lead many LibDems to question what they are getting out of the coalition. This could mean further concessions are sought by senior LibDems on issues such as banking reform. The incendiary nature of the personal attacks between Conservatives and LibDems have raised question marks about the future of the coalition.
With Parliament due to debate the radical reform of financial services regulation proposed by the Government, and the Labour party a strong critic of many of its proposals, the AV vote may well also have a profound effect on the future shape of the industry.