View more on these topics

Tory plan could axe FSA

The FSA needs to be completely overhauled and may have to be disbanded and replaced, according to a review commissioned by the Conservative party.

In his review of the tripartite regime for Shadow Chancellor George Osborne, former Treasury adviser Sir James Sassoon says the tripartite regime has “failed in critical respects” and needs significant reform.

He says the FSA must be reorganised to ensure that prudential regulation and conduct of business divisions are its core focus or two separate bodies should be created to replace the regulator.

If the FSA continues, it must be stripped of other respon- sibilities, such as financial crime and consumer education, says Sassoon.

He says the Bank of England should take over macro-prudential issues to ensure the financial system “is not again allowed to become dangerously overleveraged”.

He says the BoE should write public letters to the micro-regulator, setting out the bank’s views on systemic risk and the regulator should have to make a public response.

Sassoon says: “We should look at giving the Bank of England powers to take direct regulatory action on individual companies if it believed the micro-prudential regulator was failing. Some argue that we should fold micro-prudential regulation back into the Bank of England, this also merits consideration.”

Highclere Financial Services partner Alan Lakey says: “We have reached a stage where the beast has come to the end of its life and must be put down. We now need a regulator that is distinct from the banks that understands the advice sector and how it operates.”

Need An Adviser director Jo Roberts says the FSA should not be scrapped because the taxpayer could not afford the associated costs of the move. She says: “The FSA should now focus its work on prudential regulation and conduct of business because that is its expertise.”

Recommended

Share necessities

Share-saving schemes have been a very successful initiative to encourage greater employee engagement with companies they work for and to boost equity ownership. They have been a well received employee benefit at many companies and financially beneficial for many people.

Police swoop in mortgage case

The City of London Police have arrested nine people in a suspected £40m mortgage fraud probe. The investigation centres on defunct brokerage Eastbourne Financial Services.

Inheritance Tax, a tax on the wealthy? Urban myth or fact?

By Kim Jarvis, Technical Manager with Canada Life’s ican Technical Services Team. Inheritance tax has been around in some form since 1796. Estate duty dates back to 1894 and over the years this tax has evolved into the inheritance tax (IHT) we know and love today, which was introduced in 1986 as a replacement for […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment