Cameron Vows to Scrap FSA and Increase Bank of England's Power; Tweaking the System Is Not Enough

Western Mail (Cardiff, Wales), July 21, 2009 | Go to article overview

Cameron Vows to Scrap FSA and Increase Bank of England's Power; Tweaking the System Is Not Enough


Byline: Sin Barry

DAVID CAMERON pledged yesterday to scrap the Financial Services Authority as part of a massive shake-up of banking regulation aimed at ensuring Britain's economic recovery.

The Tory leader said the tripartite system introduced by Gordon Brown was a "policy failure of historic proportions" that was directly to blame for the crisis facing the country.

He dismissed the Government's proposed reforms as inadequate measures that jeopardise recovery, promising instead to give sweeping new powers to the Bank of England.

Under Conservative proposals, it will regulate City pay structures, risk-taking and the size of financial institutions, with the FSA swallowed up into a new consumer protection body.

The Government plans to keep the "tripartite" system - involving the Bank, the FSA and the Treasury - but introduce an overseeing Council for Financial Stability.

Launching the reform plans, with Shadow Chancellor George Osborne, Mr Cameron said: "The decisions that led to this crisis represent a policy failure of historic proportions. We now need deep, wide-ranging reform that matches both the magnitude of the crisis and the scale of the hardship inflicted on the British people.

"That reform must be based on a clear understanding of what went wrong in the first place and a clear determination to put it right."

The debt crisis had been "at best ignored and at worst encouraged", he said.

"For this, I believe the finger of blame points directly at the system of financial regulation established by Gordon Brown in 1997.

"At its heart was the tripartite system; a system in which no-one was looking at the big picture, no-one had responsibility and authority to act and no-one was effectively in charge. So those bad debts, those risky loans, the soaring house prices, the systemic risk, the asset price bubble - they all fell between the cracks of the system.

"I'm afraid the Government's proposals that all we need are a few more tweaks and a little bureaucratic tinkering are totally inadequate and risk preventing a recovery."

The Tory plan involves: The scrapping of the tripartite system, with responsibility for maintaining financial stability handed to the Bank of England. The Bank would have a powerful new financial policy committee, which would work alongside the interest rate-setting Monetary Policy Committee and include the governor and deputy governor for financial stability, as well as independent external members; New powers for the Bank of England to regulate the pay structures, risk, complexity and size of financial institutions, including requirements on those which put financial stability at risk to hold large amounts of capital to act as insurance to protect the taxpayer; The abolition of the FSA and the combination of its consumer protection functions with parts of the Office for Fair Trading to create a new Consumer Protection Agency able to stand up for ordinary people on issues like bank charges and excessive interest rates; A new senior post within the Treasury for a minister with responsibility for European finan-ciaregulation, who would spend much of his or her time in Brussels fighting Britain's corner and defending the interests of the City of London and; a new competition investigation by the OFT and Competition Commission into the effect of mergers within the banking industry, particularly last year's creation of the giant Lloyds Group from Lloyds TSB and HBOS. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Cameron Vows to Scrap FSA and Increase Bank of England's Power; Tweaking the System Is Not Enough
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.