FSA Warned Not To Make Too Many Plans Next Year

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The debate about what to do with large institutions that were directly responsible for the massive loss of financial life over the past two years has been heating up again recently. From Alan Greenspan to Paul Volcker, there is a growing chorus of people calling for the elimination of certain large organizations in their current form to avoid the economy taking another tumble while also bringing back the idea that nobody is too big to fail. One UK lawmaker is vowing to take that concept to the one area previously left out of the discussion: regulators.


The lawmaker in charge of economic policy for the Conservative opposition in the UK, George Osborne, gave the FSA advance warning that should his party win next year's elections, he intends to add their name to the list of former financial fixtures who have met their maker recently due to their inability to prevent the meltdown.

Osborne met about 70 officials at the agency's Canary Wharf headquarters in London yesterday to discuss plans to dismantle the body and transfer its functions to the Bank of England, according to one of the people who was at the meeting.

While shutting the FSA down permanently may be a bit drastic, the notion that the mere presence of a regulator justifies its continued existence is an idea the administration on this side of the Atlantic may want to rethink. Getting rid of the too big to fail doctrine can work, but only if too ineffective to succeed goes as well.
Osborne Said to Tell FSA He Will Fulfill Vow to Shut Regulator [Bloomberg]

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