In a financial reform policy white paper, released on Monday, Shadow Chancellor George Osborne plans to abolish what he calls a “failed tripartite system of regulation” and give the Bank of England responsibility for maintaining financial stability.
IFAs and mortgage brokers would be regulated by a new body called the Consumer Protection Agency, which would act as a consumer champion, with powers to name and shame firms for poor practice. The CPA would look at pricing and product suitability as well as competition in financial services and products.
Regulation of consumer credit would be transferred from the Office of Fair Trading to the CPA.
The Tories would consult on what regulatory authority should take on the FSA’s other responsibilities, including markets and securities regulation, approved persons’ licensing and listing authority responsibilities.
A new Financial Policy Committee would be formed as part of the Bank of England to monitor system risks, oversee macro-economic policy and run the regime for failed banks. A Financial Regulation Division of the Bank of England would regulate bigger institutions such as banks, building societies and insurers. A financial crime regulator could be created which would include the enforcement arm of the FSA.
The Tories admit the proposals would see industry levies rise for firms due to a need for higher-calibre regulators.
Aifa director general Chris Cummings says: “We must be careful that any proposals must increase consumer access to good, independent financial advice. The Government and regulator must increase consumer access to trusted sources of advice and not restrict it.”
Liberal Democrats would: