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Chancellor Alistair Darling has outlined his plans for reforming the regulatory system for the UK's financial system.
http://news.bbc.co.uk/2/hi/business/8104813.stmNew oversights will require banks to keep more cash in reserves and not leverage as much from their current debt levels. In England's tripartite system the Central Bank of England has checks in power with the Financial Services Authority and the Treasury. With the creating of new regulatory power the pendulum will shift more towards the FSA.
Is this a good idea? Should the United States Implement more regulations on our banks? Or is a Freer Market a better idea?? See end of Article for the U.S. perspective.
It is interesting that they are at least two steps of the US here: "President Barack Obama has announced sweeping changes to the US financial system, although he is struggling to create a single regulator in the way that the UK did in 1997, when it created the Financial Services Authority."
ReplyDeleteThey are currently adding even more power to a federal regulator which we still do not have... To me it seems we should be playing at least a bit of catch up. The idea of a "freer market" is off because the current reality is more like a series of loopholes that create free passes for big businesses with good lobbyists.
It is also noteworthy that the UK does not want to just jump in to a EU wide plan. It seems that they may be worried that although they are begining to see results with their changes, it is not necessarily a one solution fits all problem.
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