subject: Chancellor Gives More Power To Bank Of England [print this page] Chancellor George Osborne has confirmed the Bank of England will be given the key role in regulating the UK financial sector.
In the chancellors first Mansion House speech, he announced plans to abolish the current system of financial regulation.
He went on to tell the City of London that the Financial Services Authority (FSA) will "cease to exist in its current form", adding that Financial Secretary Mark Hoban would set out further details to parliament on Thursday.
Mr Osborne had previously told the House of Commons that Sir John Vickers, former head of the Office of Fair Trading, would look further into the potential break-up of Britain's largest banks.
In the chancellors first keynote address at the Lord Mayor's annual dinner to the City, Mr Osborne said the new coalition government had released details about the possibility of implementing a new system of regulation that "learns the lessons of the greatest banking crisis in our lifetime".
Mr Osborne acknowledged some of the good moves carried out by his predecessor as chancellor, Alistair Darling, but went on to criticise the current tripartite system of regulation, which split the responsibility between the Bank of England, the FSA and the Treasury.
"No one was controlling levels of debt, and when the crunch came no one knew who was in charge," he said.
As expected, Mr Osborne confirmed that the FSA would be split up and the area that monitors financial institutions would operate as a full subsidiary of the Bank of England, adding that the government would create a powerful new Financial Policy Committee at the Bank of England.
What are your views on this? Do you agree that the Bank of England should have a more significant role in regulating the UK financial sector? What would you like to see in next week's Budget?
by: Sam Gooch
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