End of FSA could leave “accountability gap”, newspaper report claims

24 August 2010

Changes to regulation with the banking industry, including the end of the Financial Services Authority (FSA), could leave an “accountability gap”, a newspaper report has claimed.

According to the Sunday Telegraph, which cited an unnamed source, many of the larger banks and the British Banking Association (BBA) are concerned that new regulatory bodies will not have sufficient checks in place to monitor their actions.

A general meeting open to the public is held by the FSA every year – however the Consumer Protection and Markets Authority (CPMA) and the Prudential Regulation Authority (PRA), which will take over regulatory responsibility from the FSA, will not be required to do so.

The PRA is not expected to hold any consultation sessions with the public while it will only be accountable to the court of the Bank of England.

Angela Knight, chief executive of the British Bankers’ Association, told City AM: “It’s clear that further work needs to be done on both the openness of the PRA and on recognition by the CPMA of the importance of regulating the UK markets, which are some of the deepest and most liquid in the world.”

George Osborner, chancellor of the exchequer, revealed the changes to the regulatory bodies earlier in the year.

By Jim Ottewill

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