Tougher regulation for financial institutions
With the Financial Services Authority (FSA) set to be replaced by two successor bodies in 2012, “tougher and bolder” regulations are set to come into force.
One of the main criticisms that has been aimed at the FSA is its slow response to problems, such as the PPI fiasco. Consequently the Financial Conduct Authority (FCA) – which will oversee the conduct of all financial services firms – will be more proactive, with new powers to intervene earlier and ban financial products and promotions.
The FCA will also regulate the finances of 24,500 personal investment firms, insurance and mortgage brokers, corporate finance companies, financial exchanges, investment managers and travel insurers; while those of banks, building societies, insurers and credit unions will be regulated by the Prudential Regulation Authority (PRA) – a direct subsidiary of the Bank of England.
