FSA abolished
The latest Financial Services Bill proposes an arrangement that will give the Bank of England responsibility for oversight of the financial system and day-to-day supervision of financial services firms, managing significant balance-sheet risk.
The Financial Services Authority will cease to exist, and a new conduct-of-business regulator will be created to protect consumers, promote competition and ensure integrity in markets.
The legislation implements the reforms by:
- establishing the Financial Policy Committee within the Bank of England to monitor and respond to systemic risks;
- clarifying responsibilities between the Treasury and the Bank of England in the event of a financial crisis by giving the Chancellor of the Exchequer powers to direct the Bank of England where public funds are at risk;
- transferring responsibility for significant regulation to a new body, the Prudential Regulation Authority; and
- creating the Financial Conduct Authority to ensure that business across financial services and markets is conducted properly.
