Tories vow to tighten bank regulation
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Sweeping changes to the way Britain's banks are regulated would be introduced by a Tory government in an attempt to avoid a repeat of the financial crisis. They will modelled on a report to be published today which calls for the break-up of the Financial Services Authority (FSA) and handing back the job of regulating the financial sector to the Bank of England.
The issue could become a key dividing line at the next general election. Gordon Brown may be reluctant to break up the FSA because he set it up as Chancellor in 1997, when he took responsibility for regulation from the Bank.
Senior Tories said they would look very seriously at today's 80-page blueprint by Sir James Sassoon, a former senior Treasury official under Mr Brown, who was asked to investigate the regulatory system by the shadow chancellor George Osborne. Sir James called for a "major overhaul" of the system, in which responsibility is shared by the FSA, the Bank and the Treasury, saying it had not brought financial stability.
He said last night: "At the very least, the FSA needs a major internal reorganisation to put prudential regulation at the heart of the organisation. But we should also look at more radical options including breaking up the FSA and moving aspects of institutional regulation back to the Bank of England."
His report argues that the FSA focused excessively on the conduct of business regulation at the expense of prudential regulation. As a result,it failed to prevent individual institutions putting the stability of the entire system at risk.
Mr Brown will come under pressure this week over his role in last autumn's merger between Lloyds and HBOS, after a second government bailout of the Lloyds Banking Group. The Government's stake will rise from 43 to up to 77 per cent in return for insuring £260bn of the bank's toxic assets.
Brown aides insist that the two banks were intent on the merger. But opposition parties accused the Prime Minister of trying to get the credit for brokering the deal at the time, saying he could not walk away from it now.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments