How much longer can the FSA survive?
Today, the Parliamentary ombudsman trashed the hapless regulator in a report on Equitable life. In the report, the Ombudsman made ten determinations of maladministration naming explicitly the FSA, the Department of Trade and Industry, and the Government Actuary's Department in relation to their regulation of Equitable up to December 2001.
The FSA was probably the worst idea that New Labour conjured up when it was first elected in 1997. Under its watch, UK banks financed an unsustainable housing bubble, which is now unwinding, and threatening to bring the financial system down. It passively watched while the UK suffered the first bank run in over one hundred years. Now, we learn that it is guilty of maladministration over the Equitable Life fiasco.
The FSA's regulatory functions should be returned to the Bank of England. It is failed institution that will keep on failing until someone has the good sense to abolish it.
The FSA will stay as long as Brown as PM. As soon as he goes, it goes.
ReplyDeleteIt wasn't just the FSA that took the hit. There were others to blame.
ReplyDeleteWill Darling pay up?
I wholeheartedly agree that the FSA has lost all credibility and needs urgent reform. I'm absolutely behind the idea that the BoE picks up the responsibility.
ReplyDeleteI disagree, however, that it is obvious that the FSA was a bad idea for NuLabor... objectively, it won them the 2005 elections, didn't it? I'm inclined to think that the FSA was set-up to fail to regulate in order to establish the boom that encouraged a feel-good factor that the government was more competent than expected with respect to "fostering growth". I think that it more to do with corrupt than incompetent behaviour by the treasury that the FSA has been foisted upon us.
"Will Darling pay up?"
ReplyDeletecws. I take it you don't pay taxes then?
Nick