Sants backs Osborne reforms

THE key to effective financial supervision is making good judgements rather than structure, Financial Services Authority (FSA) chief executive Hector Sants said yesterday.

“I don’t really consider structure is the central issue. I consider making good judgements is the central issue,” Sants told the Chartered Institute for Securities and Investment’s annual conference in London.

The chancellor George Osborne, announced on Wednesday that he would scrap the FSA and divide up its powers between the Bank of England, a new white collar crime-busting agency and a new consumer protection and markets authority.

Sants will oversee the transition and head the Bank’s new regulatory subsidiary.

“We would expect all our new policy decisions to be taken forward into the new structure,” Sants said.

The bulk of financial rules applied in Britain are approved at the European Union level and Sants said the influence of the bloc’s regulatory structure is growing considerably.

Most prudential rulemaking will pass to a large degree to new pan-EU authorities being set up next year, he said.