BSA calls for new regulatory regime to promote corporate financial diversity

BSA calls for new regulatory regime to promote corporate financial diversity

BSA calls for new regulatory regime to promote corporate financial diversity

The BSA has identified a number of key concerns regarding the proposed new approach to financial regulation. These include the concentration of power in the Bank of England, increased costs and complexity, and overlapping responsibilities.

It believes the contrasting objectives of the Prudential Regulation Authority and Consumer Protection and Markets Authority will externalise conflicts that under the FSA have been managed within a single body.

The BSA especially focuses its attention on the following four points in its response to the Treasury:

. the need to build diversity into the financial system
. the potential cost and complexity of the new arrangements
. the inappropriateness of the CPMA’s proposed role as “consumer champion”
. Bank of England and FPC accountability.

Adrian Coles, Director-General of the BSA commented: ‘It is clear from the Treasury Consultation Paper that there will be significant increased running costs and complexity for institutions, which ultimately means that customers face greater costs. We are especially urging the Treasury to undertake careful planning to ensure that the new regulatory burdens do not disproportionately affect smaller firms. Furthermore, we seem to be building a more concentrated regulatory system, with a greater amount of power in fewer hands and, at the same time, building a more concentrated banking system with greater market share among fewer institution; this could lead to a huge concentration of risk’.

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Notes to Editors

1. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 49 UK building societies. Mutual lenders and deposit takers have total assets of over £365 billion and, together with their subsidiaries, hold residential mortgages of almost £235 billion, 19% of the total outstanding in the UK. They hold more than £245 billion of retail deposits, accounting for 21% of all such deposits in the UK. Mutual deposit takers account for about 36% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.

2. Photographs of Adrian Coles are available from the BSA press office, or from the Association’s website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk.

3. The BSA’s response to HM Treasury’s consultation A New Approach to Financial Regulation: Judgment, Focus and Stability can be viewed here – www.bsa.org.uk

4. Contact Fiona Cornes – fiona.cornes@bsa.org.uk / 020 7520 5926″>

Katie Errington
Policy and External Affairs Officer
Building Societies Association
6th Floor, York House
23 Kingsway
London
WC2B 6UJ

Tel: 020 7520 5904
Fax: 020 7240 5290
Email: katie.errington@bsa.org.uk
Web: www.bsa.org.uk