Brown signals future financial regulations

Future plans for private banking services regulation in the UK were unveiled yesterday by the prime minister.

Gordon Brown promised a ’more diverse’ financial services sector, in the wake of the credit crunch and economic downturn.

The proposals also affirmed the place of the Financial Services Authority (FSA) as the ’primary mechanism’ through which the markets are regulated.

This follows heavy criticism from some analysts of the way the current tripartite regulatory system, consisting of the Treasury, the Bank of England and the FSA, is set up.

Some had proposed a radical overhaul which would have seen the Bank of England taking on powers and responsibilities currently held by the watchdog.

Mr Brown said: ’Through the future Financial Services and Business Bill, the government will toughen the regulation of the financial system, ensuring that the FSA has sufficient powers to do its job and improve efficiency and competition.

’We will consider how to make it easier for new entrants to join the banking market and make existing participants more diverse.’

Responding, Angela Knight, chief executive of the British Bankers’ Association, added: ’The banking industry is facing a very significant programme of change.

’Where better supervision, better co-ordination and more coherent rules are required this must take place.’ ADNFCR-2318-ID-19242818-ADNFCR