The four external members appointed by Chancellor George Osborne to join a new Bank of England committee which will oversee financial regulation in the UK were announced yesterday, as the Government released more details on its plans to replace the Financial Services Authority (FSA).
Among the senior business figures who will become part of the interim Financial Policy Committee (FPC) is Sir Richard Lambert, the former head of the Confederation of British Industry, who left the lobby group in last month.
He will be joined as a member of the watchdog by Donald Kohn, previously the vice chairman of the Federal Reserve, and Alastair Clark, who is currently a senior adviser to the Treasury. Michael Cohrs, a former banker at Goldman Sachs and Deutsche Bank, is the fourth appointment.
The business giants will sit alongside seven previously announced figures on the interim FPC, which will be chaired by the Governor of the Bank of England, Mervyn King.
These include four other senior Bank of England officials as well as both the chairman and the chief executive of the FSA, Adair Turner and Hector Sants.
The announcement is the latest step in the Government's plans to overhaul the regulatory system, which will see the FSA broken up and replaced by more specialised bodies.
It is hoped the FPC will be able to prevent future financial crises, such as the credit crunch, although it will also be instructed to make sure its actions do not hamper the long-term growth of the economy.
"I am delighted to be able to announce these appointments to the interim Financial Policy Committee," said Mr Osborne. "The skills, expertise and experience they bring are invaluable and I am confident we have the right people to do the job."
At the same time as announcing the appointments, the Treasury also revealed more details on how its proposals for a new regulatory system will be implemented.
In its current interim incarnation, the members of the FPC will meet in preparation for legislation – which the Government intends to introduce next year – which will result in the committee being established permanently with a number of formal powers.
The FSA will then be dissolved, with many of its duties taken on by two new bodies overseen by the FPC, which will be able to instruct them. The Prudential Regulation Authority (PRA) is one of these, and will be in charge of regulating the banks and insurance companies. The other body will be the Financial Conduct Authority (FCA), whose brief will be to look out for consumers as well as helping market efficiency. Among its powers will be the ability to ban financial products which it sees serious fault with.
"The Government is delivering on its commitment to reform the financial system, to avoid repeating the mistakes of the recent financial crisis and to ensure taxpayers are protected," said Mark Hoban, Financial Secretary to the Treasury.Reuse content