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Govt may still scrap the FSA

The Government is still considering scrapping the FSA in its shakeup of City regulation, according to reports.  

The Guardian says Chancellor George Osborne will use his Mansion House speech on June 16 to give the Bank of England control of macroprudential supervision.

The paper reports that Whitehall sources say the FSA is set to lose its independent role and the Treasury is still considering completely abolishing the regulator.

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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Pissed Off IFA 3rd June 2010 at 11:05 am

    FSA fines JP Morgan £33.32, this says it all. Who suffers ? The long suffering investor whilst these parasites at the FSA line their pockets.Why does the FSA not help JP Morgan? Because they want a hand out to line their pockets. Good old Hector is on £500,000 per annum and the rest. Gid rid of them! The only problem is we will be landed with other load of scroungers.

  2. Michael Pearman 3rd June 2010 at 11:27 am

    I cannot seem to remember , did Hector get fined for his blatently Political email to staff during the election ?

  3. No he didn’t, and it wasn’t blatantly political it was only as reported as such.

  4. Julian Stevens 3rd June 2010 at 12:10 pm

    “the FSA set to lose its independent role”? Ah, hang on, independent of what? It certainly isn’t independent of government (despite Hector Sants having falsely claimed exactly that on national TV). For a start, the FSA’s web address is fsa.gov.uk which is a government department address.

    That aside, my view has always been that abolishing the FSA would, in practice, amount to little more than partitioning it and at great expense which, as usual, will be dumped on the financial services industry.

    A better place to start would be to hold the FSA to account over its brazen and virtually total disregard for the Statutory Code of Practice for Regulators. Build on what’s already there and strip out bad regulatory practice. Followed in short order by bringing regulators’ pay levels into line with other public sector bodies and creating an ombudsman to arbitrate over complaints against it which presently it either just ignores of brushes off. Accountability. Let us not forget that one of the prime directives of the FSA is supposed to be promoting confidence in the UK financial services system, not persecuting certain sectors of it to the brink of extinction for the purposes of engineering some grand Utopian vision of how the FSA would like it to be.

    The industry is rightly sick to death of the FSA lecturing it on what it should be doing whilst at the same time running its own house in a shambolically profligate manner, like some unaccountable gravy train funded by what it clearly perceives to be an inexhaustible cash cow.

    It may be wishful thinking, but I would like to see the cost of the FSA, if not taken on in its entirety by central government, then at least divided between central government and the industry, with regular reviews undertaken by the National Audit Office. Come to think of it, the NAO was going to undertake a review of the FSA some years back but nothing actually ever happened, at least as far as I’m aware. Practices such as paying £20m in bonuses and ending up £14m in the red should be first on the list to be outlawed, in line with a general strategy of forcing the FSA to observe both UK Law and international Human Rights Law.

    The FSA surely needs fixing, big time, but dismantling it entirely and creating a whole new quango (or a group of quangos) staffed largely by all the same people is not the way to go about it it.

    Still, at least we may draw some comfort from the fact that the Conservatives haven’t decided to kick the whole idea of regulatory reform into the long grass. God knows we need it.

  5. I dont see why the Govermen is still considering abolishing the FSA they should get on and do it now. It is plainly obvious to see that it has been a totally useless regulator only interested in lining their staff pockets at the expense of the IFA community, and trying hard to completely ruin financial services in this country

  6. for the first time ever im actually looking forward to the unemployment figs going up by -now lets see how many do the FSA employ

  7. FSA is not independent of anything, if it was the government couldn’t break it up could it?

    Rebranding the FSA won’t make any difference, the same regulators will occupy the same seats behind the same desks.

    Regulation is bust and the only people who will benefit from the exercise of moving the deckhairs around will be the printers, the ‘consultants’ who messed up last time, the time before that and the one previous and the regulators themselves.

    In ten years time I might still be around to say “I told you so”.

    Anybody disagree? Don’t care if you do.

  8. Agree cost should be met by central government but disagree that abolishing the FSA will not solve anything. Yes of course many of the staff will be the same but then how many of us have had problems with the ordinary staff? My personal experience has been they are decent and reasonable people.

    The problem is the leadership and direction the FSA has taken which at best has in many cases been ill conceived, and at worst simply bordering on evil.
    I only know of the Park Row fiasco from a distance but as far as I can gather some perfectly decent advisers who had done nothing wrong were not allowed to earn a living for several months.
    Many small organisations including mine were relieved of significant sums (ours was £1,600)by the FSA over the failure of an provider (Keydata) many of us had never used and the FSA had failed to oversee competently.
    The Chief Executive was unable to give even a ball park figure to the Treasury Committee of how many advisers would be affected by the level 4 element of the RDR.
    The banks brought the nation to its knees on the FSA’s watch.
    The list of incompetent episodes involving the FSA is endless but it is the failure of the leadership, not the staff.
    Empower the Bank of England as far as the banks are concerned. Ditch the key figures (presumably the 100K + earners) asap.Move the remaining foot soldiers to a new organisation, consumer orientated as the Conservative party plans originally suggested. Wave goodbye to a sad and expensive failure.

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