ippr criticises "messy" financial regulation system

Potential future reforms of the UK’s tripartite financial regulation system are still up in the air, an influential think tank said today.

Tony Dolphin, senior economist at The Institute for Public Policy Research (ippr), said that the present system was a ’bit messy’ and added that it had ’failed’ to do its job in the current financial downturn.

Currently, banks and other financial services providers are overseen by the Treasury in Westminster, the Bank of England in the City and the Financial Services Authority (FSA) in Canary Wharf.

The ippr’s comments follow a report released by the House of Lords Economic Affairs Committee, which called for sweeping changes to the tripartite system.

In particular, the definition of roles and responsibilities between the three bodies was criticised - and the committee also recommended that the future regime focus more sharply on system-wide financial stability.

Mr Dolphin commented: ’This system is a bit messy and the main worry about it is it just isn’t clear where the ultimate responsibility lies.

’The idea of going to the Bank of England and saying: ’you are responsible for this, if it goes wrong yours are the heads that will roll’ does produce a lot of clarity which I think is what is needed.’ADNFCR-2318-ID-19205228-ADNFCR