Knight says no to a new Big Bang
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Your support makes all the difference.Angela Knight, the Treasury minister, yesterday rebuffed pressure from City regulators and the Labour Party for radical changes to the Financial Services Act.
Speaking at a conference to mark the tenth anniversary of Big Bang - the reform of the Stock Exchange - Mrs Knight said structural change would be "diversive (sic), expensive, disruptive for the industry and would take a considerable period of time".
Mrs Knight, the minister in charge of City regulation, said she had never yet found a group of people where "anything approaching a majority of those present are in favour of wholesale change of the Financial Services Act".
Changes would always be the result of a compromise in Parliament, and what the financial services industry wanted was not more change but stability, she said.
Labour plans to fold all the City regulatory bodies into the senior regulator, the Securities and Investments Board.
But it also became clear this week that the chief executives of several of the key regulatory bodies are pressing for big structural changes.
Richard Farrant, chief executive of the Securities and Futures Authority, and Colette Bowe, his counterpart at the Personal Investment Authority, are both thought to back a radical shake-up - but they disagree with the Labour proposals for a single authority.
Instead they favour a double-headed system in which regulation is split between a body responsible for the health of financial institutions and a second organisation devoted to financial consumer protection.
Mrs Knight said she preferred a streamlining of the existing system with "less box-ticking and bureaucracy".
In another Big Bang anniversary speech, John Kemp-Welch, chairman of the Stock Exchange, said the next 10 years would see a huge increase in demand for equities across the world, and London was well placed to take advantage of it.
In 1994 alone, nationalised industries worth $60bn were privatised - from Moscow to Mexico City - and from now until the end of the decade a further $160bn of equity would be sold, of which about 35 per cent would go to outside investors. He added: "Even in the former USSR privatisation figures are startling, with more than 40 million Russians holding shares.''
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