Over at WealthBriefing.com, Tom Burroughes proposes a radical change to the way financial services are regulated in this country:
Much of the UK’s financial services industry does not need to be overseen by a single state regulator, and only banks linked to the payments system should be under such surveillance, according to a new report by the Institute of Economic Affairs, a free market think tank.
The report, called Does Britain Need a Financial Regulator?, challenges much prevailing opinion that has argued for tougher, more comprehensive rules and regulations to prevent a repeat of the recent market turmoil, affecting sectors including family offices. The US has recently signed into law sweeping regulations of banking and financial services; in the European Union, the bloc is moving to tighten oversight of hedge funds.
The IEA report is here (PDF). A briefing note to accompany it can be found on the IEA website.
Philip Booth, Editorial Director at the IEA and author of the report, “Does Britain need a financial regulator?” said:
“The market mechanism is enough to guarantee effective regulation: the number of financial scandals has not reduced in the era of statutory, bureaucratic regulation. Other than in the case of banks dependent on the Bank of England for deposit insurance and lender of last resort facilities, the financial system should be left to self-regulate.”
“If the coalition genuinely wants to create better regulation in the financial sector, along with more competition and cheaper capital for companies, they should scrap the FSA and the vast majority of its functions and leave the financial sector to itself as far as possible.”