Iain Anderson is Director at Cicero Consulting.
There have been acres of ink expounded on the proposals to scrap the Financial Services Authority since George Osborne published his plans in opposition in July 2009.
Those plans did give HM Treasury officials almost a year to get ready for the likely changes and to develop an implementation strategy. And the Chancellor’s impressive Mansion House speech last week did lay out a clear roadmap towards those reforms. So officials have clearly and quickly got with the programme!
However I think some more clarity is needed around who will lead the reforms and how oversight will take place on a day to day basis.
The Chancellor has rightly pointed to the deficiencies of the Tri-Partite arrangements between the Bank of England, FSA and HM Treasury under the previous administration. Politically I think it is important right now to show that HM Treasury will not just lead the reforms – as it must – but that it will also ensure there is a clear, ongoing oversight process in place at Treasury after 2012 when the new regulatory bodies are in place.
That may mean there is a need to beef up the ‘oversight’ function in terms of staff at HM Treasury – but that is a small price to pay to ensure both accountability and we have people in place to ask the right questions of the Bank of England and the other new authorities.
Speaking to current FSA and Bank of England officials since the speech, I think they would welcome this lead.
Attending this week’s FSA Annual Meeting, it was already clear that the locus of power is ebbing away – the question and answer session was the most lacklustre affair I have seen for years ending half an hour before its allotted time.
I hope we will see the publication of the full legislative proposals soon and that the Government looks to have a priority track for the legislation in the coming session to ensure that we can get on with the process of UK regulatory change and also keep our eyes on the wider global financial debate to ensure the UK is able to maintain competitive advantage.