Wednesday, June 16, 2010
A much more powerful Bank
Posted by David Smith at 10:00 PM
Category: Thoughts and responses

In his Mansion House speech, here, George Osborne set out what was pretty much Conservative policy on the shake-up of the regulatory system. The Financial Services Authority will cease to exist in its present form, most of its responsibilities for regulating banks and other institutions becoming a division within the Bank of England. Hector Sants, the FSA's chief executive, will become a deputy governor of the Bank and the changes will take full effect by 2012.

At the same event Mervyn King warmly welcomed his new responsibilities, while suggesting that he is in no hurry to raise interest rates, stressing spare capacity, the weakness of money supply growth (1%) and of earnings (2%). Above-target UK inflation largely reflected past falls in the exchange rate, he said. His speech is here.