Tory promise to abolish FSA creates havoc, chief says
The Financial Services Authority could struggle to operate effectively after the Tories revealed their plans to abolish it, chief executive Hector Sants is warning.
It is already facing difficulties recruiting staff, and at the FSA's annual meeting yesterday, Sants said that the Conservative plan "could be and [already] has" become a problem for the City watchdog.
The FSA's chairman, Lord Turner, also criticised shadow chancellor George Osborne's intention, if the Tories win the next general election, of handing regulation back to the Bank of England and introducing a beefed-up consumer protection body instead of the FSA.
He said: "The effort which the FSA and the Bank of England will devote alongside each other will be far more important to the future soundness of our financial system than any debate about what the future division of responsibility between us should be."
But Lord Turner also admitted that the regulator's future "is unsettling" during a crucial period for the financial sector, when "vital international decisions" are being made.
