George Osborne has set out plans to abolish the failed tripartite system of regulation and give the Bank of England responsibility for maintaining financial stability.
At a speech in the Bloomberg offices, the Shadow Chancellor said the regulation system set up by Gordon Brown had failed.
And he launched a white paper on financial regulation, entitled ‘From crisis to confidence: Plan for sound banking’.
The document explains how a Conservative Government will create a strong regulatory framework, as an essential component of a sustained economic recovery. We will:
- Abolish the Financial Services Authority (FSA) and the Tripartite regime it operated with the Bank of England and the Treasury
- Create a strong and powerful Bank of England with the authority and powers necessary to ensure financial stability
- Create a powerful Consumer Protection Agency that will bring together in one place the consumer powers currently split between the old FSA and the Office of Fair Trading
- Demand that banks set aside much more of their own money for their risky lending as a form of insurance policy
- Appoint a Treasury Minister with special responsibility for fighting our corner in Brussels so that European regulations are right for the City of London
- Ask the Office of Fair Trading and the Competition Commission to conduct a focused examination of the effects of consolidation in the retail banking sector.
At the launch, David Cameron said, "The decisions that led to (the banking) 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 public."
George stressed, "If we can bring stability to our banking system, and reward long-term returns over short term bonus chasing, then we will have put in place a key foundation stone of an economic recovery."