Osborne plans to scrap UK’s financial regulator

| 17/06/2010

(Bloomberg): The UK’s Chancellor of the Exchequer George Osborne had said he will abolish the Financial Services Authority and give most of its power to the Bank ofEngland, undoing the regulatory system set up by Gordon Brown in 1997. In the most sweeping changes to financial regulation since then, the watchdog will be wound down and replaced by three bodies over the next two years, the chancellor said. A Prudential Regulatory Authority will be created as a subsidiary of the central bank. Osborne says he will also set up a Financial Policy Committee at the bank and establish a consumer protection and markets agency.

 Osborne, whose Conservative Party took power after the May 6 election, is delivering on a promise made almost a year ago to shake up the way the U.K.’s banks and markets are policed. He’s blamed the system established by former Labour Prime Minister Brown for failing to prevent a financial crisis that saddled taxpayers with liabilities of as much as 1.4 trillion pounds ($2.1 trillion) and plunged the economy into the worst recession since World War II.


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