It calls for a fundamental reform of financial regulation and suggests the FSA may need to be disbanded and replaced by a “twin peaks” model of two bodies – one responsible for micro-prudential issues and one for conduct of business.
Sassoon believes the option of returning prudential supervision to the Bank of England should be investigated.
FSA chairman Lord Turner himself promised a regulatory revolution at a recent Treasury select committee meeting, ahead of its upcoming paper on banking regulation, but Sassoon is concerned this may not be enough.
Advisers have been first-hand witnesses to the failings of the regulator since its inception, be it through overburdensome regulation, failure to spot the real risks in the system or its troubled relationship with other bodies, whether it is the Treasury, European Commission or Financial Ombudsman Service.
Lord Turner’s recent performances before the TSC and in speeches have been impressive and we await this month’s paper with interest but it is right that a fundamental debate about the future of the FSA now takes place with all options left on the table.