The evolving coalition government taking shape in England may allow the Financial Services Authority to survive the election after all. As previously discussed here, the Tory party has indicated its desire to eliminate the FSA and consolidate all banking supervision under the Bank of England.
However, the Financial Times reports that under a complex five-year coalition deal struck with the Liberal Democrats, the FSA might not be abolished. The deal will reportedly allow the Bank to take “macro-prudential control – monitoring systemic risk in the economy” but no responsibility for regulating individual banks.
On Tuesday night, an aide to George Osborne, the new Tory chancellor, acknowledged that “the FSA might survive.”
