Banking Reform

Lord Newby Excerpts

Thursday 17th June 2010 Lords Chamber

[Lord Newby]

My Lords, our concerns about plans to abolish the FSA in the run-up to the election centred, first, on our concern that the governor was not the person to be in charge of micro-prudential regulation and, secondly, that there would be a long period of hiatus in which there would be no continuity in senior management on financial regulations. We are greatly reassured by the fact that Hector Sants has been persuaded to stay on to deal with the second problem and, given his new position, will be able to deal largely with the first. Can the Minister reassure us that both the Government’s and the Governor’s top priority over the next few months will be to ensure that as many of the senior members of the FSA staff as possible remain in place to work with Hector Sants and to ensure the continuity which everybody thinks is so important?

[Lord Sassoon]

I am grateful to my noble friend Lord Newby for pointing out, very helpfully, how the Government’s programme in this area has taken account of some of his concerns from before the election. On the transition, it might be helpful if I additionally confirm that the FSA will remain the financial services regulator until the legislation is implemented, so it is quite clear who will be doing what. I am grateful to my noble friend for stressing the management arrangements and I will relay to both the Bank and the FSA his concern that they do what is of course a high priority—to make sure that they retain the essential and extremely good staff they have in both organisations.