HISTORIC PRESS RELEASE : New Financial Regulator to be called Financial Services Authority [October 1997]

The press release issued by HM Treasury on 28 October 1997.

New Financial Regulator to be called Financial Services Authority

The new financial regulator will be called the Financial Services Authority, Chancellor Gordon Brown announced today at the launch of the new organisation.

The new regulator will take over responsibility for banking supervision from the Bank of England, financial services regulation from the Self-Regulatory Organisations (SROs) and insurance.

Announcing the new name, the Chancellor said:

“The name encompasses what the new regulator is all about. It is clear, straightforward and easy to understand which is exactly the way we want to see the new regulator viewed.

“The Financial Services Authority will bring the regulatory structure closer into line with today’s increasingly integrated financial markets. It will bring more effective and more efficient supervision, giving both firms and customers more confidence in the system.

“It will improve the competitiveness of the financial services sector and create a regulatory regime to meet the challenges of the 21st century.”

The Chancellor announced that statutory objectives would be set as part of the accountability framework for the new regulator. The Chancellor said:

“One of my aims in setting up the new regulator is to improve the arrangements for accountability to Ministers and to Parliament. I believe that statutory objectives can play an important role in achieving this.

“The objectives we set will give the new regulator a clear sense of its priorities. And will provide a benchmark against which the performance of the regulator can be measured. They will form the basis of the regulator’s annual report to me”

The Memorandum of Understanding between HM Treasury, the Bank of England and the Financial Services Authority was also published today. This sets out the framework of cooperation between the three institutions.

Work is currently underway on drafting the legislation to bring the new regulator into being. The draft Bill will form the basis of consultation in the summer of 1998.