The financial industry is in for a major awakening should the Conservative party receive the keys to power in the next general election says Channel 4 News.
Plans outlined by the party has revealed that one casualty of their proposed financial shakeup would be the Financial Services Authority (FSA) with their power being transferred to the Bank of England.
Under the Conservative’s proposals, the BoE would also have the power to regulate city pay structures, risk complexity and size of financial institutions; including requirements on those which put financial stability at risk to hold large amounts of capital to act as insurance to protect the taxpayer. Meanwhile, the Financial Services Authority would be amalgamated into a new consumer protection body.
Currently the UK financial system is controlled by a triumvirate involving the Bank of England, the FSA and the Treasury and it is this model which David Cameron, the Conservative party leader, believes is inadequate and failed to protect the country’s economy during the recession.
Launching the reform plans, Mr Cameron said: “The decisions that led to this 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 people.
“That reform must be based on a clear understanding of what went wrong in the first place and a clear determination to put it right.
“I’m afraid the government’s proposals that all we need are a few more tweaks and a little bureaucratic tinkering are totally inadequate and risk preventing a recovery,” he said.
Interesting times ahead in the city should the Tories sweep to power…