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George defies call for new PIA chief and backs Palmer

EDDIE George, Governor of the Bank of England, has given his backing to Joe Palmer as chairman of the Personal Investment Authority, the body expected to take over regulatory responsibility for the private savings markets.

Mr George was giving evidence to the House of Commons' Treasury Committee, which yesterday issued a report that said: 'The credibility of the PIA would be advanced by the appointment of a new chairman.'

Some regard Mr Palmer as an inappropriate chairman of the PIA, since he spent many years with Legal & General, the life insurer recently fined for breaching investor protection rules.

But Mr George said he had confidence in Mr Palmer, and believed he could earn the public's confidence by putting the PIA's machinery in place.

Mr Palmer said he had no intention of stepping down from the PIA. He had served a reasonable quarantine period since leaving L&G in 1991. 'Overall, I am an asset to the PIA and will continue to be one,' he said.

The Treasury committee's interim report on financial services regulation - issued despite serious disagreements within the committee - backed the concept of a single retail regulator as a means of providing better investor protection.

But the report said: 'The evidence we have taken has cast serious doubt on the PIA's likely effectiveness.'

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