There’s a huge regulatory revolution happening the UK right now as George Osborne, UK’s finance minister, is scrapping the FSA and is dividing its powers between the Bank of England, a new white-collar crime unit and a new Consumer Protection and Markets authority.
I wonder what are the implications for retail forex brokers.
This is what FT reports:
George Osborne moved to redress what he described as the spectacular regulatory failure of the City, announcing the abolition of the Financial Services Authority and a sweeping increase in the Bank of England’s powers.
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Mervyn King, the Bank’s governor, will become one of the most powerful central bankers in the world, with a new remit to prevent the build-up of risk in the financial system in addition to his monetary policy role.
Mr King told a City audience at Mansion House on Wednesday night that his new role in enforcing financial stability was to “turn down the music when the dancing gets a little too wild”.
Mr Osborne confirmed his plan to split up the FSA – a creation of Gordon Brown in 1997 – which the chancellor largely blames for failing to spot the approaching financial hurricane and the weakness of banks like Northern Rock.
“The FSA became a narrow regulator, almost entirely focussed on rules-based regulation,” Mr Osborne said in his first Mansion House address. “No-one was controlling levels of debt and when the crunch came no-one knew who was in charge.”
The FSA will lose much of its role to a new Consumer Protection and Markets Authority, charged with regulating the conduct of every bank and policing the City.