Pragmatism, not fast law, will help
the UK exit the recession say
Mark Parkhouse & Andrew Jackson
Inadequate banking regulation in the UK has, arguably, led to a shrinking economy, increased unemployment and an increase in business failures. In the wake of the recession, economists are debating whom to blame, where to shift the power, and what tools to use to prevent future failures.
Alistair Darling is sticking by the strengths and weaknesses of the tripartite system. This division of labour allocates responsibilities between the Financial Services Authority (FSA), the Bank of England and the Treasury. Each institution has come under criticism for a lack of effective communication prior to the recession, and for not taking sufficient preventative action early enough.
Whereas Mervyn King politely blames the government for the downturn, and appears willing to initiate a campaign for greater centralised power in the Bank of England. Mr King has spoken out over the “extraordinary” budget deficit and the failure of the Treasury to consult with him over reform plans. All parties agree that the banking regulatory system requires further reform,
