View more on these topics

Bank can’t replace the FSA, says Brown

Prime Minister Gordon Brown says the Tories’ plan to scrap the FSA and revert back to pre-1997 regulation will not work.

Speaking at his last conference before his summer break, Brown attacked the Tories’ proposals to scrap the FSA if they return to Government next year.

Brown said: “There is a consensus in this country, and I’m sorry the Conservatives are outside it, that if you’re going to regulate at an individual level your financial institutions, your banks, then you’ve got to have an agency that is responsible for doing so.”

Brown warned that it is “the wrong thing to do” to allow the institution which control fiscal levers to also control the entire financial services sector.

He said: “The idea that [the tripartite is] broken is completely wrong. It’s got to be made, as have all the other regulatory systems, as effective as possible for the future. I think when people look at this they will say the Conservative Party was always in favour of the old self-regulatory system that never worked and to return to something like that is completely unacceptable.

“I think we have got to get some perspective in this debate, and it’s only when you work in this system and look at it that you know it would be completely wrong to abolish the FSA.”

In an interview with City AM, City minister Lord Myners says the Conservatives have misjudged what the Bank can and cannot do. He says: “The Bank is a very academic institution. It is not actually about doing things.”

Myners cites the collapse of the BCCI and Barings in the nineties, which happened under the jurisdiction of the Bank, as evidence that the FSA must be kept as the individual regulator of financial institutions.

He also claims that the Bank does not even want the extra powers that Shadow Chancellor George Osborne has proposed for it. He says: “The Bank of England does not want the new powers, nor does the Takeover Panel and nor does the Financial Reporting Council.”

Myners says the White Paper put forward by the Tories last week was “incomplete” and was poorly thought through. He says: “What we’ve heard so far represents about 20 pieces out of a 100 piece jigsaw.”

Recommended

1

FSA fines HSBC £3m

The FSA has fined three HSBC firms over £3m for not having adequate systems and controls in place to protect their customers’ confidential details from being lost or stolen.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Jonathan Purle 23rd July 2009 at 9:44 am

    And another thing…
    I see you didn’t include CITY AM’s quote from a Tory spokesman on Myners rubbish about BCCI etc: –

    “For the minister who was given the runaround by Fred Goodwin – and signed off his pension – to tell anyone, let alone the Bank of England, that they don’t know what they’re doing is truly breathtaking and shows just how out of touch Labour really are.”

  2. Banking supervision
    If Money Marketing will forgive me for questioning the accuracy of everything I read in the press, did Lord Myners really say that the collapse of BCCI happened “under the jurisdiction of the Bank” ?
    Whilst the Bank of England was resonsible for banking supervision at the time of the collapse, BCCI was a Luxembourg bank not a British bank so arguably the Bank of England was not responsible for it’s supervision. Sometimes our regulators deserve criticism but let’s be accurate and fair when we do it ? I happen to beleive that banking supervision was something the Bank of England performed particulalrly well – can the same be said of the FSA ?

  3. Julian Stevens 23rd July 2009 at 4:14 pm

    Bank can’t replace the FSA, says Brown
    Who gives a toss what Gordon Brown or the Labour party think? They’ll be gone within 12 months and good riddance.

  4. Sad Men way out of their depth
    Time for an October election as the UK can not afford to drift further into debt for another 10 months at the rate it is stacking up.

Leave a comment