Brown attacks Conservative plans to axe FSA

Brown attacks Conservative plans to axe FSA


Conservative plans to lay off the FSA in favour of a more powerful Bank of England have been slammed by the Prime Minister, who said it would be “completely wrong” to get rid of the tripartite regulatory system he launched in 1997. 

At his final Downing Street conference before the summer recess, Mr Brown defended the FSA and cited numerous regulatory failures before 1997 that the Bank of England was responsible for.


Mr Brown added: “If anything, the FSA should have greater powers in the year to come.”


Under Conservative plans, outlined earlier this week in their White Paper entitled: “From crisis to confidence: plan for strong banking”, the FSA would be abolished and the Bank of England made responsible for prudential regulation – including all banks, building societies, insurance companies and ‘other significant’ financial institutions.


The Conservatives would also give the Bank of England authority to regulate pay structures, risk, complexity and size of financial institutions.


However the Prime Minister said this would be “unacceptable” and condemned the Bank’s ability to have control over all financial institutions as well as setting interest rates and keeping check on the stability of the economy. He also said the wide reaching powers of the Bank of England had the potential to create a “conflict of interest.”


Shadow chancellor George Osborne hit back at Mr Brown, claiming that he was “blindly wedded” to a failing regulatory system that has shown lack of leadership throughout the banking crisis.

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