Scrapping the FSA for a new regulatory structure is an exercise in “rearranging deckchairs” and will have no significant impact on regulation, according to LibDem Treasury spokesman Lord Newby.
Speaking at a fringe event at the LibDem conference this week, Lord Newby said: “The whole of that reorganisation is just rearranging deckchairs
on a beach and that remains my view. I do not think that it is a game-changer and I expect it will have no significant impact on regulation.
“I suppose one of the consequences will be the brass plaque outside will have FSA taken off and Bank of England put on.”
Newby said it is vital that Hector Sants stays on while the FSA is divided into the Prudential Regulatory Authority and the Consumer Protection and Markets Authority.
He said: “The key question is whether it is going to collapse during the transition but I think Hector Sants and his senior people are very cognisant of that. The transition is not going to happen tomorrow, it is going to be at the back end of this session at the earliest.”
LibDem Business Secretary Vince Cable told a separate fringe meeting he did not think scrapping the FSA is a priority: “In opposition, I said I did not really think the break-up was necessary but the Government has decided to do it and I will try to help make it as smooth a transition as possible.”