Britain's Treasury chief announced an overhaul of his country's financial regulatory system Wednesday, one which dissolves the country's finance watchdog and hands broad new powers to its central bank.
George Osborne said the Bank of England would soon be responsible for keeping an eye on lenders, insurance companies and investment banks in addition to supervising the health of the economy overall, something he said would help avoid a repeat of the credit crisis that nearly brought the British economy to its knees.
"Because central banks are the lenders of last resort, the experience of the crisis has also shown that they need to be familiar with every aspect of the institutions that they may have to support," Osborne told a gathering of financiers at Mansion House in central London.
Osborne said his reforms would dismantle the three-point regulation system — comprising the central bank, the Financial Services Authority, and the Treasury — set up by former British Prime Minister Gordon Brown while the latter was Treasury chief in 1997.
The FSA has long been criticized by Osborne and others for failing to foresee the near collapse of Britain's banking system in the wake of the credit crunch. The treasurer said the authority would be broken into three smaller units — one which retained responsibility for consumer protection, another responsible for fighting economic crime, and a third unit that would be folded into the Bank of England.
Hector Sants, the FSA's chief executive, will remain at the organization's helm before moving to the Bank of England, where he will become the chief executive of its bank oversight unit, Osborne said.
Osborne said more details of the reorganization would be made public by Financial Secretary Mark Hoban on Thursday. The changes would have to be ratified by Britain's parliament, and could take as long as 2012 to come into effect.
~ more... ~
No comments:
Post a Comment