Financial Services Authority (FSA)

George Osborne and Mervyn King’s Mansion House speeches have just been published. Their content makes it clear that the Bank of England will be all-powerful in UK financial regulation and Mr King will sit on top of the new castle. He was already so powerful he felt able to make jokes about the chancellor’s youth, something I gather is generally not popular in Number 11.

(Boring aside. Mr Osborne is 39, 23 years younger than Mr King, a subject on which the governor chose to dwell at some length in a way that, to put it politely, bordered on patronising.)

Earlier today I wrote a list of things we did not know. Here are the answers in red:

  • What “oversight of micro prudential regulation” precisely means. It is a slippery concept which could include anything from the movement of the entire supervisory role of the Financial Services Authority into the Bank of England to a very limited role for the Bank in gaining more access to information. It means making the banking supervisors from the FSA a subsidiary of the Bank of England. Hector Sants of the FSA will be the new chief executive of the prudential regulator and a Bank of England deputy governor. This subsidiary will carry out

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Let no one accuse the Bank governor of complacency. He insisted otherwise in his Mansion House speech just published. But he is on pretty confident form.

The governor insisted the weakness of the economy would create “spare capacity [that] will press down on inflation” which is currently running at 3.4 per cent.

But that is not all. So evidently effective has monetary policy proved Read more

George Osborne’s mansion house speech tonight is generating lots of interest because it is billed as the moment he reveals his blueprint for financial regulation in Britain. Most of the speculation in the media this morning is of the “let’s print Conservative Party policy and pretend it is a scoop” variety. I have not seen the speech by the chancellor, nor the reply from Mervyn King, Bank of England governor, so here is a quick guide to what we know and don’t know.

What we know for certain

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Swedish finance minister prepares Swedish banks for Latvian collapse. Gold may be heading to $1,500 a troy ounce, with many investors confused why; and has the G20 already broken its pledge to transparency and a rebalancing of power? Read more

While we are doing anniversaries, it is two years since Mervyn King launched a tirade against moral hazard and bailing out bankers. He had to do it all the same. But his words sound better two years on when we are thinking about devising a new and safer banking system. Read more

Alistair Darling is getting into election campaign mode and clearly thinks Adair Turner of the FSA is talking nonsense. All this and more in an interview with the Financial Times, writes Chris Giles Read more