James Moore: Few tears likely as City watchdog FSA is put down

Outlook It's hard to see there being many mourners when the Financial Services Authority finally shuts up shop and hands over to the Financial Conduct Authority and the Bank of England.

But at least it's finishing with a flourish. In addition to a number of blockbuster fines and successful prosecutions for insider dealing, the watchdog yesterday announced what appear to be some sensible new rules that ought to make it easier for new start-ups to enter Britain's banking industry.

Under the plans, we are promised that it should take only six months or so to get a new banking venture authorised, down from about two years at present. What's more, new boys won't have to hold capital cushions over and above what existing players have to keep back. If they can prove that they can be wound up in an orderly fashion (good luck), they'll be allowed to hold less.

It's true that these changes don't come risk-free. It's not just banks wilfully making it difficult to switch that might persuade people it's not worth the hassle of trying out a "challenger" bank. After the carnage of the last few years, many depositors will feel that its "better the devil you know".

Lighter capital rules on new entrants could exacerbate this feeling.

On the other hand, a debate about whether this part of the new rules allows new boys to get off too lightly is really rather pointless.

After all, European Union rules mean that there's nothing to stop people from getting around the UK regulations by setting up in another EU territory where the regulations make even the new lighter regime look like a straitjacket.

Take AgriBank, with its wonderful high interest savings bonds. It has found a way of setting up in this country and selling them without any depositor protection whatsoever. As you will see by checking out its website, although you'd be best off arming yourself with a powerful magnifying glass to read the warning.