The US is considering moving regulatory powers from the central bank to an independent financial regulator. This is at odds with George Osborne's approach.
A day after Financial Services Authority chief executive, Hector Sants, called the Conservative party’s plans to split up the financial regulator a return to the “dark ages“, reports outline that the United States are considering an approach which would move powers from the central bank to an independent financial regulator. This is the opposite direction of travel to George Osborne’s plans.
The Associate Press reports that:
“Senate Banking Committee Chairman Christopher Dodd on Tuesday called for sweeping new government powers to prevent another economic collapse, protect consumers and dismantle failing institutions.
“Dodd’s 1,100 page-draft would strip the Federal Reserve and other regulators of their powers to regulate banks and hand that job to a single agency.“
The Conservative party announced in July that they plan to scrap the FSA and move banking regulation to the Bank of England.
Hector Sants said:
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“I strongly believe that dividing responsibility for enforcement activity would invite a fragmentation of approaches and a ‘turf war’ between the different bodies involved
“Truly effective institutions are built on strong cultures and….strong cultures need time and experience to evolve.”