GFS LinkedIn
GFS Facebook
GFS Twitter
GFS RSS feed

Hung Parliament in UK leads to question marks over future direction of financial regulation

Wednesday 12 May 2010 - by John Rowland


Liberal Democrat Shadow Chancellor Vince Cable has called for the break-up of the big banks: “Casinos belong in Las Vegas not in banking. We want straightforward, simple banks which do the basics well; not laboratories for financial rocket scientists.”

The Conservatives have said that they would look at Glass-Steagall type arrangements if there was international agreement.

There are also disagreements on the institutional structure of regulation. The Conservatives believe the so-called tripartite regulatory arrangement - which splits powers between the UK Treasury, Bank of England and Financial Services Authority - failed in the financial crisis.

George Osborne who is the new Conservative Chancellor, proposes to abolish the FSA and hand many of its supervisory powers back to the Bank, while creating a new conduct of business regulator. Both Labour, who created the FSA in 1997, and Liberal Democrats oppose this and argue that radical reform would be a damaging distraction.


These differences in position mean that financial reform could be an important bargaining chip, with the Liberal Democrats able to push the Conservatives to act on bank break-ups in exchange for concessions in other areas.

Parliament returns on 18 May with the new Government’s legislative programme expected to be delivered to Parliament the following week. With no party decisively holding power we can expect deal-making to characterise the life of this Parliament and that can only lead to further uncertainty for the UK financial sector.


Article pages: |  1  |   2  |



WHAT DO YOU THINK?
 
Name:
   
Email:
   
Comment:
   
Post as Anonymous
  Display name
   
Please, enter security code
   
 

No comments yet.

STRAW POLL

Will markets in 2012 have a tougher time than 2011?

Yes

No

Don't know

View results

FIND A REGION world regions