Tripartite system 'needs improving'

A professor of economics at Cass Business School called today for a radical shake-up of the tripartite system.

Geoffrey Wood said that the way the financial markets are currently regulated is causing confusion between the Treasury, the Bank of England and the Financial Services Authority.

This view chimes with a recent report from the House of Lords Economic Affairs Committee, which criticised the undefined nature of what regulatory roles each of the three organisations took on.

Mervyn King, governor of the Bank of England, also said last week that the system needed improving.

’The Bank finds itself in a position rather like that of a church whose congregation attends weddings and burials but ignores the sermons in between,’ he commented.

Professor Wood said: ’One of the problems with the current system of regulation is that nobody is actually in charge.

’I think the tripartite structure is fundamentally defective. Everyone made mistakes ... the banks made mistakes and the regulators made mistakes but it is quite clear that the actual structure of the regulatory system was not satisfactory before the crisis.’ADNFCR-2318-ID-19229606-ADNFCR