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Shake-up won't give me too much power - King.

Byline: Iain Laing

BANK of England Governor Sir Mervyn King has denied he is being given too much control under a shake-up of the financial regulatory system.

The Financial Services Authority (FSA) is to be scrapped as part of plans to make the Bank of England a super-regulator, giving it additional responsibilities for overseeing financial stability and the health of companies.

In a grilling by the Financial Services Bill joint committee, Sir Mervyn denied that his role was being handed too much power, although he admitted it was "already a big job".

However, he suggested that if politicians still thought he had too many responsibilities, they could make the Prudential Regulation Authority (PRA), which will take over responsibility for supervising the safety and soundness of individual financial firms, an independent body. Under current plans, it will be part of the Bank.

He said he had delegated much of the responsibilities to his colleagues to help share the workload but it was important the Governor was ultimately in charge if he was to be accountable to Parliament.

He added: "If there was a major problem within the Bank, I'm convinced that you would want to call the Governor to appear before you and ask what went wrong, and you couldn't do that unless the Governor was chairing the bodies.

"I think it's do-able provided that it is understood that the Governor would delegate many responsibilities."

As part of the plans, a new body called the Financial Policy Committee (FPC) has been created, which will sit within the Bank of England and will take over responsibility for maintaining the UK's overall financial stability - a role that currently lies with the Treasury and the FSA.

The FSA will be split in two, with one arm becoming the PRA, also under the control of the Bank, while the FSA's consumer protection work will be carried on by the Consumer Protection and Markets Authority (CPMA), which will be an independent body.

A Which? survey revealed earlier this week that 73% of people do not believe the FSA was effective enough in standing up to the banks in the run-up to the financial crisis.

About eight in 10 (82%) feel it should be handed more powers to force the banks to change.

More than three-quarters of those surveyed (76%) did not think that banks can be trusted to self-regulate.
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Publication:The Journal (Newcastle, England)
Date:Nov 4, 2011
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