Good grief!

A sensible, idea from the Tories.

The Tories will this week publish a review of financial regulation that raises the possibility of abolishing the FSA and returning banking oversight powers to the Bank of England.

Putting banking regulation back with the people who a) know about banks and b) end up paying when they go wrong and taking it out of the hands of the box tickers sounds like a very good idea indeed.

7 comments on “Good grief!

  1. Only thing that worries me is, that the expertise you mention has been dissipated in the last 11 years, so going back to them will be a false dawn.

    Alan Douglas

  2. They could do much better than that… Getting rid of every last vestige of any legislation passed since 1997 would be a reasonable start – before going after the remaining quangocracy with a big axe.

  3. “Only thing that worries me is, that the expertise you mention has been dissipated in the last 11 years, so going back to them will be a false dawn.”
    Don´t worry the people who had probably are probably still alive and with how investments have gone could do with some money.

  4. Funny how everyone, even the Right, had been going around for years saying that the best thing Brown ever did was to take power away from the Bank of England.

  5. A lot of the Bank regulatory staff went to the FSA. I’m not sure I see an obvious correlation between regulation being done by the central bank and a lack of banking problems. Also if everyone now says the BoE can’t run monetary policy, why would they be so good at regulation?

  6. Matthew is right. A lot of the banking supervision at FSA was down by former Bank staff. Moving them back to the Bank to do the same job there might be good politics but I am not sure it would make any real difference. There was a time when people used to point to Johnson Matthey, BCCI and Barings as failures of banking supervision at the Bank. I question how fair that was. The role of the regulator seems often to be to take the blame when things go wrong. The history of recent decades suggests to me that the surest way to avoid repeated financial crises is to run a much more controlled banking system with very restricted competition between banks. The consumer no doubt pays in such circumstances but people may well now decide that is a price worth paying. Perhaps ‘Competition and Credit Control’ and Big Bang were not such good ideas after all.

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