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Watchdog barks too late

Published 24/11/2010

It's obviously quiet at the Treasury right now, with not much going on to trouble ministers and mandarins. That's why it's such an ideal time to shake up Britain's system of financial regulation (again). This is naturally not something you'd want to do when times are difficult. The Financial Services Authority proved that, dropping the ball on Equitable Life while it was distracted by other things, like bringing together nine regulatory bodies and getting the staff to talk to each other (they didn't).

But that's not a problem today because things are so much calmer now than they were at the end of the 1990s. That little problem across the Irish Sea? Nothing to worry about. Yawning deficits? Cutbacks?

Anyway, giving all the prudential stuff to the Bank of England while creating a Consumer Protection -amp; Markets Authority will make everything better, once we get through the pain. Having sat on its hands in the run up to the financial crisis, the pendulum has swung violently. The FSA appears hellbent on preventing thousands of people who would be perfectly able to afford mortgages from getting them. The problem is that having sat back and all but said 'fill yer boots' while lenders threw money around like confetti and borrowers rushed in, the regulator has gone too far in the other direction.

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