Increased powers for FSA

The UK’s financial regulator, the Financial Services Authority, is set to get increased powers in a bid to try and avoid another crisis similar to the Northern Rock one taking place.

The additional powers are to be granted by the Chancellor of the Exchequer, Alistair Darling.

As part of the additional powers the Chancellor plans to enable the Financial Services Authority to seize customers’ money from banks in order to try and protect it if a bank finds itself facing the kind if difficulties experienced by Northern Rock last year.

The news of additional powers being granted to the FSA was welcomed by many industry professionals, including the British Banker’s Association.

One official from the BBA stated: “Early intervention has to be right when a financial institution gets into difficulty. These are technical areas and we have to get them right.”

At present a consultation over these additional powers has to take place, and it is thought that any changes will be implemented in May.

Darling has also stated that following the Northern Rock crisis he will be making changes to the tripartite system, which comprises the Chancellor, the Bank of England, and the Financial Services Authority.