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.”