If the Conservatives win the general election, the Financial Services Authority will be the one to carry the can for its part in the banking crisis. The Tories want a split regulatory system, with the Bank of England returning to regulate the banks and a new Consumer Protection Agency to safeguard the interest of the consumer. The FSA will be no more. But while George Osborne, the shadow chancellor, talks of a "powerful new regulator" and a "powerful new consumer protector", I doubt whether the upheaval will be worth it. For a start, many current FSA employees used to work at the Bank of England. One can only assume that should the Bank regulate the banks again, many will return to Threadneedle Street. What's more, many of the senior figures at the FSA who presided over the crisis walked away long ago. Lord (Adair) Turner, the former CBI boss, is in the chair and his report on the future of regulation received much praise. He has distanced himself from the FSA's dark past and has called for a more heavy-handed approach to regulation.[Read more...]