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FSA prepares for new financial stability objectives

The FSA is preparing to take on new financial stability objectives being proposed under the Financial Services Bill.

The Bill, currently before Parliament, proposes an additional statutory objective for the FSA of contributing to the protection and enhancement of the financial stability of the UK financial system.

It also proposes the establishment of the Council for Financial Stability, replacing the existing Tripartite arrangements, and changes to the Financial Services and Markets Act 2000, giving the FSA broader information-gathering powers.

The FSA’s Business Plan, published today, says the regulator welcomes the new powers, adding it will help it achieve its goals, including enhanced information-gathering exercises.

The Bill proposes removing the FSA’s public awareness objective, which will in future be the responsibility of a new consumer finance education body.

The new body’s overall running costs for 2010/11 are budgeted at £45.4m and the FSA’s annual funding requirement will be collecting £32.9m of these costs.

This represents a 38.2 per cent increase on the equivalent financial capability costs for 2009/10 of £21.7m.

The FSA says the increase is largely driven by additional staff costs and professional fees to deliver the national rollout of Money Guidance from spring 2010.

In addition to this increase, there is a £2.9m recharge from the FSA for providing services to the new consumer finance education body.

The Treasury’s contribution to the body’s overall running costs for 2010/11 is £12.5m.

The FSA states: “Although the proposed legislation will change the basis on which we undertake work to promote financial stability and introduces areas that have not traditionally been considered part of our regulatory remit, our supervisory approach and planned regulatory reform programme will continue largely unchanged.

“This is because we have already recognised our role in relation to financial stability, as set out for example in The Turner Review and our 2009/10 Business Plan.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Great idea! Fail to do what you should do so give them more powers so they can fail to do even more

  2. Incompetent Regulators Awards Team 17th March 2010 at 3:01 pm

    Oh yes, I see the FSA could be really useful here. Is this a joke?

    FINANCIAL STABILITY.

    I’m shouting BANKING COLLAPSE BANKING COLLAPSE BANKING COLLAPSE – CAN YOU HEAR ME?

    The best thing to do is have no regulator at all in this area, hence the BOE take over under the Tories. As the FSA made no difference in financial stability.

    All this bullsh*t is starting to make me sick.

  3. So many new initiatives, new quangos, new products (NEST) and of course all the additionls costs of all these rushed through legislation all points to a desperate last breath of a bloated entity.

    God I do hope so otherwise it will be even more dire than it is now.

    The only power we have over the FSA as a group is sadly our wallets as we cannot sue them or take any action against them to obtain justice yet they have complete power over those who pay them.

    We need to stop paying them en mass for them to take notice as when their income source stops you can bet they will listen, otherwise keep paddling.

  4. All these new ideas and legislation and costs I hope are the final breaths from a failing entity.

    The FSA has utter power over us and we have no say whatsoever in what they do or are entitled to any compensation when they make mistakes, unlike when we make mistakes when we are fined or banned etc. !!

    They can dip into our wallets whenever they like as again we have no say in the matter.

    They are protected by statute so we cannot sue them.

    Would you like to run such a business ?

    The only power we have over the FSA is to close our wallets and stop paying them. Then they may listen to us, otherwise expect more of the same and increased costs.

  5. Chocolate fireguard?

  6. Apologies for second posting didn’t think it was posted so repeated myself !!

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