Britain has unveiled sweeping changes to its system of financial regulation, handing more power to the Bank of England (BOE) and abolishing the framework set up by the last government.
Chancellor of the Exchequer George Osborne said in a speech late on Wednesday that the BOE would get powers to regulate individual financial firms, in addition to its remit to monitor the overall health of the economy.
The Financial Services Authority (FSA), which regulates the City of London but came in for heavy criticism for its failure to foresee the near-collapse of Britain’s banking system, would be abolished.
Some of its responsibilities would be handed to the Bank of England, while others would be injected into new organizations.
The so-called “tripartite” system — which shares responsibility for regulation between the BOE, the FSA and the finance ministry — would be ended, the chancellor said. It was set up by the previous Labour administration.
Osborne said the financial crisis, which plunged Britain into its worst recession since the 1930s, showed powers to monitor both individual firms and the general state of the economy needed to be centralized at the BOE.
“Because central banks are the lenders of last resort, the experience of the crisis has also shown that they need to be familiar with every aspect of the institutions that they may have to support,” he said.
“So they must also be responsible for day-to-day microprudential regulation as well,” he said.
Giving the speech in central London, he added the proposals amounted to “a new system of regulation that learns the lessons of the greatest banking crisis in our lifetime.”
Osborne revealed the shake-up at his first Mansion House speech, an annual address to business leaders that is one of the most high-profile in the finance minister’s calendar.
The decision to concentrate oversight powers at the Bank of England was aimed at better coordinating responses to future crises, he said.
“When the crunch came, no one knew who was in charge,” he said.
The part that monitors financial institutions would become a “prudential regulator” and would operate as a subsidiary of the Bank of England. Some of the FSA’s powers would be injected into a separate consumer protection and markets authority, while others would be put into an agency for fighting economic crime.
FSA chief executive Hector Sants would stay on to oversee the transition which would be completed in 2012, Osborne said.
Bank of England Governor Mervyn King welcomed the reforms, saying the previous set-up at the FSA had not been effective.
“In a crisis, decisions must be made quickly and decisively and the central bank, working with government which is always responsible for any use of public money, needs to be in charge,” he said. “That was one of our painful lessons.”
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from