July 21, 2009

Adair Turner and Hector Sants, Britain's top financial watchdogs, are facing an anxious wait. The Conservatives, now miles ahead in the opinion polls, are preparing to sweep away the government's widely-criticised 'tri-partite' system of banking regulation.If, as is looking increasingly likely, the Tories win the next election, the Financial Services Authority would be stripped of its role in policing the City.

Its responsibilities for preventing individual banks from taking excessive risks would be handed to the Bank of England.And the 'Old Lady' would also be awarded new 'macro-prudential' powers to ensure that the dangerous credit bubbles do not build up again.A denuded FSA would be rebranded as the Consumer Protection Agency - a mere guardian for customers of the financial services industry.