Abolition of the FSA

As you will have read in your morning papers or heard on the news the Chancellor, George Osborne, announced last night that he will abolish the FSA creating a new Consumer and Markets Protection Agency, a new Economic Crime Agency and leaving the part of the FSA that supervises banks other substantial financial institutions as a Prudential Supervisor which is subject to the oversight of the Bank of England.  The Bank of England will also be given greater powers with regard to the management and oversight of financial stability issues.

All of this is consistent with Tory policy and manifesto commitments prior to the election but the rumour mill, prior to this announcement had, at first, suggested that the FSA would survive and the ambitious Conservative agenda would be slimmed down.