Osborne blasts FSA over collapse of Lehman Brothers | Business | guardian.co.uk

Osborne blasts FSA over collapse of Lehman Brothers | Business | guardian.co.uk: "Osborne, though, said it was important to take away the regulatory responsibilities that were handed to the FSA in 1997.
'We need a change of approach to regulation, and I think the people best able to bring about that change are the Bank of England. They have the ability to step back and take bigger judgment calls about how indebted the economy has become and whether or not, even though things have been technically complied with, the bigger picture points to serious risks to the economy.'"


Dear Mr Osbourne

The FSA and the legislation supporting it was created by Parliament. Yes, all those MPs voted (when they could be bothered to attend) for a system with many large gaps and the entire banking system fell into one of them because the FSA is not as operationally independent as you and your political colleagues might have been let to believe.

You are now taking advice on the reformation (yet again) of regulation from people who created the last regulator, and the one before that. Please explain what will be different, apart from the name, if you get your own way and reshuffle the regulators who have been sitting behind those desks for two and a half decades, more than 740 of them were at the Bank of England before they were transferred to the FSA yet they failed to spot the dead parrot.

Make no mistake, the "City" is deeply concerned by your proposals, so am I even if one of your advisers who was initially unhappy with breaking up the FSA reassures me that he now believes some positive changes can come about.

As an observer of regulation since 1985 I am not convinced that you or any of your advisers have what it takes to try something radical.

Yours faithfully

Evan Owen
Regulatory consultant